GDP Quarterly National Accounts: 2023 Quarter 3 (July to September)

Revisions

In this release, Scotland’s onshore GDP has been fully open for revision back to 1998 Q1. GDP and its components have been updated based on the annual weights and benchmark levels from the Supply and Use Tables for 1998-2020, published on 29 November 2023. This has led to changes over time in the level of all components of GDP to match the annual values in the supply and use tables, and revisions to the latest years due to changes in the base year values and relative weights of various components. Details of revisions can be found in the downloadable tables.

As discussed in the previous release, GDP in volume terms continues to be based on industry weights and benchmark levels of double deflated GVA up to 2019, and has not incorporated the weights for 2020 from the Supply and Use Tables. This is because the disruptions to economic activity during 2020 do not provide a suitable baseline for statistics covering more recent periods. There have been some revisions to earlier years to reflect changes in the latest Supply and Use Tables or to price deflators, but there has been no significant change to the long term trends compared to the last publication. The most up to date weights for 2019 will continue to be used as the latest base year until weights for 2022 are available.

Revisions to volume GDP in 2022 and 2023 are largely driven by further updates to price deflators which are now fully consistent with recent UK GDP statistics which were revised last year following the release of the UK Blue Book 2023. In particular, the impact of the updated deflators has caused upward revisions in the communications (section J), professional services (section M) and administrative and support services (section N) subsectors. Further upward revisions are due to the update of forecast output levels in further and higher education with actual student numbers for the year 2021-22.

Measurement of GDP and consistency with results for the UK as a whole

There are some differences between the estimates for Scotland and the UK after 2019 due to the faster timescales for updates at UK level and differences between methodologies used. While the level of output in some industries and in total GDP are still broadly comparable to the UK as a whole, for many industries those comparisons should be made with caution. Specifically, whilst the UK statistics for real terms GDP growth are based on double deflated gross value added (GVA) for 2020 and 2021 (that is, the prices of both outputs and inputs are separately accounted for), the estimates for Scotland are only double deflated up to 2019 and the estimates for 2020 onwards are based on output only.

Learning from the experience at UK level, where the introduction of double deflated estimates for 2020 in September 2022 led to large downward revisions to GDP, which were then largely reversed by large upward revisions when double deflated estimates were introduced in September 2023, we are waiting until we can produce double deflated estimates for both years before introducing them into our time series at the same time. This development is intended to maintain stability in the estimates for Scotland, but at the expense of some comparability with the figures for the UK as a whole. On current timescales, we are likely to introduce double deflated GDP for 2020 and 2021 in the release for 2024 Quarter 3, following the production of Supply and Use tables for 1998-2021 (autumn 2024) based on the ONS Regional GDP statistics for the same period (summer 2024) which are derived from the ONS Blue Book 2023 statistics released on 31 October 2023.

Users should continue to be cautious about drawing conclusions based on comparisons between Scotland and the UK or other countries for the periods when the economy was most severely impacted by the coronavirus pandemic, or comparisons of relative levels of GDP compared to the pre-pandemic level. The estimates of GDP from 2020 onwards are continuing to evolve as more data becomes available, and it is likely that these results will change again in future releases.