Susanna Clark
Director of Research, Scotland
Although Scotland’s economy performed better than expected in 2018, consumer and business confidence remain low due to the ongoing impact of Brexit uncertainty and the prospect of a second independence referendum.
Although Scotland’s economy performed better than expected in 2018, consumer and business confidence remain low due to the ongoing impact of Brexit uncertainty and the prospect of a second independence referendum. Scotland’s GDP grew by 1.3% over the year to Q4 2018. Equivalent UK growth was 1.4% according to Government statistics.
National Records of Scotland data shows that the population continued to increase over the year in 2018, with a record high of 5.44 million people now living in Scotland. Migration continues to be the main driver of Scotland’s population growth, with more people coming to Scotland than leaving. According to Scotland’s Labour Market statistics from December 2018 to February 2019, unemployment in Scotland fell to 3.3%, the lowest rate on record and lower than the UK (3.9%) for the seventh month in a row. Unsurprisingly consumer sentiment weakened over the quarter falling by 3.8 points. The Scottish Consumer Sentiment Indicator was negative at -9.6 in Q1 2019. The indicators for current and expected economic performance were both negative and worsening in Q1 2019, signifying that sentiment relating to Scotland’s economic performance remains weak. A lack of clarity continues to weigh on market confidence and decision making.