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EY Scottish ITEM Club Summer update 2018

Overview

Scotland, a mixed outlook

Our latest EY Scottish ITEM Club Summer update 2018 provides a mid-year temperature check of Scotland’s economic position.

The forecast that Scotland would equal the UK in terms of growth in 2017 fell short of the mark, however the growth we have seen is welcomed following a previous period of stagnation. The final quarter of 2017 in particular saw growth accelerate but this momentum could be challenged with growth for 2018 expected to slow. Scotland needs to forge ahead and remain resilient to ensure that its economy can grow and compete both with the UK and the global market.

Key findings

  • Scotland’s non-oil GDP forecast to grow by 1.3% in 2018, up from 0.8% in 2017
  • The UK is expected to stretch ahead of Scotland with 1.6% non-oil GDP growth despite both previously being predicted to reach 1.4% in 2018
  • Consumer spending to drive future economic growth but will remain cautious in the current low savings ratio climate
  • A strengthening sterling will impact on export growth
  • Modest employment growth of 0.7% is expected, partly due to a reduction in net migration

 

Economic growth in Scotland is moving in the direction previously predicted in our forecast at the beginning of the year, marking a sizeable increase from 0.8% in 2017. While this demonstrates Scotland is set to successfully pull out of an economic tailspin and return to growth above 1%, there are also signs that UK-wide economic growth will remain firmly ahead of Scotland’s."

Mark Gregory

Chief Economist, UK and Ireland

 

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