Monthly economic brief: December 2021

Output

Scotland's GDP grew 0.2% in October and is 0.4% below its pre-pandemic level.

• Scotland's GDP grew 0.2% in October with growth in services (+0.3%) and production (+1.0%) output offset by a fall in construction output (-3.4%).^[1]

• October saw further growth in some consumer facing services such as accommodation and food (+3.1%), though at a more moderate pace than in recent months, while arts, culture and recreation output fell 5.2%, its first monthly fall since February. Growth in the production sector was partly driven by 5.6% growth in electricity and gas output, which has been relatively volatile in recent months across different modes of generation and maintenance at major power stations, while manufacturing output fell 1.0% over the month.
• Overall growth in October followed growth in September (+0.9%) and falls in output over July (‑0.4%) and August (-0.2%) with growth over the third quarter as a whole slowing to 1%, down from 5.6% growth in the second quarter.
• The slower pace of growth over the third quarter partly reflects that the boost in output from restrictions easing on consumer facing services over the second quarter had moderated, while supply chain disruption has been impacting on activity in construction and manufacturing output in particular.

• Scotland's GDP is gradually returning to its pre-pandemic levels and as at October was 0.4% below its pre-pandemic level in February 2020, having fallen 22.3% below in April 2020. However there remain significant differences across sectors in the pace of recovery, which continues to partly reflect the restrictions that have been in place earlier in the year, levels of demand across sectors at this stage of the recovery and the impact of supply chain disruptions on the pace of activity.

• Output from some sectors in services are above pre-pandemic levels, such as professional, scientific and professional services (7.3%) and wholesale and retail (1.6%). Construction and manufacturing output, which had returned to pre-pandemic levels in recent months and subsequently fallen back, were respectively at 3.4% and 0.7% below in October. Some consumer facing services sectors such as Arts, Culture and Recreation (-20.6%), which are continuing to recover from restrictions earlier in the year, remain amongst sectors furthest below pre-pandemic levels.