Monthly economic brief: June 2021

Output^[1]

Scotland's GDP grew 2.0% in April, though remains 3.7% below pre-pandemic levels.

• Scotland's GDP grew 2.0% in April (UK: 2.3%), its third consecutive month of growth following the period of falling output between November and January as Covid restrictions tightened.
• Growth in April was driven by the services (2.6%) and production (0.8%) sectors offsetting a fall in construction output (-2.0%), which fell back following strong growth in March.

• Growth in consumer facing parts of the services sector were boosted by the phased easing of restrictions on consumer and business activity in April. For example, accommodation and food services output grew 61% over the month while non-food retail grew 10.7%. There was also further contribution to growth from education due to all secondary pupils returning to in-school learning, following the phased return of primary pupils in February and March.
• Production sector growth was driven by the manufacturing sector (3.8%) with growth strengthening across food and drink (4.5%) and chemicals and refined petroleum products (4.0%). This offset falls across the other production components: mining and quarrying (-2.6%), electricity and gas supply (-5.8%) (due to maintenance at nuclear power stations) and water supply and waste management (-4.3%).

• The 3-months of growth between February and April mean that Scotland's GDP has recovered the recent fall in output over November to January and has restarted its recovery back to its pre-pandemic level in February 2020 (having initially fallen to 22.7% below in April 2020). In April 2021, Scotland's GDP was 3.7% below its pre-pandemic level, its highest level during the pandemic, and in line with the recovery in UK GDP as a whole.
• However there remain significant differences across sectors in the pace of recovery which largely continues to reflect the different levels of restrictions that have been in place over the past 15 months, and the extent to which this has, and continues to, influence demand and trading capacity within sectors.
• Parts of the services sector (both private and public) are currently operating above their pre-pandemic levels of output. Output from professional, scientific & technical services (+5.3%) and financial and insurance activities (+1.7%) has recovered relatively quickly from initial falls in output at the start of the pandemic as levels of demand resumed and businesses were able to adapt (e.g. working from home). Manufacturing output has also recovered (+3.8%) having fallen 22.9% initially between February and April 2020.

• Consumer facing parts of the services sector however have been more directly impacted by restrictions on activity over the course of the year and despite the easing of some restrictions in April, remain furthest below their pre-pandemic levels. For example, accommodation and food services output is at its highest level since July 2020, however remains 45.7% below, while arts, culture and recreation output is at its highest level since June 2020, however remains 42.4% below its pre-pandemic level.
• The overall pattern of Scottish GDP in 2021 continues to be broadly in line with the UK as a whole, as it was in 2020, with differences between months largely reflecting sector differences and the stringency and timing of restrictions.