Scottish economic bulletin: March 2024

Output

Scotland’s GDP grew in December but contracted over the fourth quarter.

• Scotland’s economic output grew 0.4% over the month of December 2023 however fell 0.6% over the fourth quarter as a whole. This follows 0.4% growth in Q3 and a fall of 0.2% in Q2, meaning that while Scotland’s GDP fell in two of the last three quarters, it avoided entering a technical recession in the second half of 2023, unlike the UK as a whole where GDP fell for two consecutive quarters.^[1]

  

• However economic growth over 2023 as a whole (compared to 2022) has been subdued across both Scotland (0.2%) and the UK (0.1%). Furthermore, the 0.6% fall in output in the fourth quarter was broad-based across the services (-0.1%), production (-3%) and construction (-1.3%) sectors and was the largest quarterly contraction since the start of 2021.
• In the services sector, the fall in output was marginal overall (-0.1%) with key drivers being falls in financial and insurance activities (-1.1%) and retail and wholesale (-1.6%). More broadly, growth in consumer facing services was flat over the fourth quarter and fell 0.2% over 2023 as a whole indicating that inflationary pressures are continuing to impact on economic activity in those industries.
• Within the production sector, the main driver of the 3% fall over the quarter was in the manufacturing sector in which output fell -3.7% over the quarter and 5.6% over the past year.