Despite a strong performance in 2018, Scotland’s economic growth in 2019 is forecast to fall behind the UK’s as its labour market weakens and business investment falters. While Scotland’s economy outperformed the UK’s in 2018, the tables are set to turn in 2019 with its real growth predicted to slow to 1.0%.
Similar to 2018, consumer spending is expected to make a significant contribution to the Scottish economy in 2019, but this is due to be fuelled by consumers running down their savings rather than through a growth in wages.
The private services sector will continue to drive growth across Scotland, contributing more than 70% of GVA growth in 2019. Within this group, professional, scientific and technical activities are predicted to be the most notable for Scotland, edging ahead of the UK’s performance in this area.
In terms of individual sectors, construction is forecast to have the highest growth rate, followed by professional, scientific and technical activities, with information and communication in third place.
- Economic growth (by GVA) in Scotland is forecast to slow from 1.6% in 2018 to 1.0% in 2019, while the UK is set to increase from 1.3% to 1.5% respectively
- Scotland’s working age population is predicted to fall by an average of 0.4% per year for the next five years
- Private services sector will continue to drive growth across Scotland, contributing more than 70% of GVA growth in 2019
- Construction is the sector expected to drive most growth in 2019 at 3% GVA
The pace of economic growth achieved in Scotland during the past year appears to be unsustainable as pressure mounts on the already delicate labour market and business investment remains subdued. Scotland has proved it can grow its economy faster than the UK but failing to invest in capital at this time will limit future growth and the possibility of outpacing the UK.
Scotland Attractiveness Survey 2019
Scotland retains its position second to London for FDI attractiveness.
- Mark Gregory
- Chief Economist, UK
- Mark Harvey
- Senior Partner, Scotland
- Clare Carswell
- Media Relations Manager, Scotland