Monthly economic brief: January 2022

Output

Scotland’s GDP grew 0.8% in November and is back above its February 2020 pre-pandemic level for the first time.

• Scotland’s GDP grew 0.8% in November, with the pace of growth picking-up into the start of the fourth quarter following relatively flat growth over July and August.^[1]

  

• Growth was broad based across the services (0.5%), production (1.7%) and construction (3.6%) sectors in November. Services sector growth saw a pick-up in professional, scientific and technical services output (3%) while there was growth in parts of hospitality, including accommodation and food services (1.9%) and arts, culture and recreation (4.6%).
• Production output growth continued to strengthen on recent months (1.7%) supported by a pick-up in manufacturing output (1.7%). Sectors continued to face significant supply chain challenges in November however, while the boost to output growth from restrictions easing earlier in the year continued to fade.
• Scotland’s economy reached an important milestone in November in the recovery from the pandemic with Scotland’s GDP growing to above its February 2020 pre-pandemic level for the first time (+0.6%), broadly in line with the UK as a whole (+0.7%), having fallen 22.4% below in April 2020. Over the course of the pandemic, the Scottish economy has broadly tracked the UK economy.

  

• 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.
• Within the services sector, output in consumer facing services remains 5.5% below pre-pandemic levels, while output from health, education and public services is 5.2% above, and output from all other services is back to the same level of output as prior to the pandemic.
• Output in the production, construction and agriculture group first returned to pre-pandemic levels in June 2021 before falling back again over the third quarter, driven by volatile output across the manufacturing, construction and electricity and gas supply subsectors. Output in this group is currently 0.6% above its pre-pandemic level.