New data

Scottish economy expected to slow down next year

St James development Edinburgh

GDP fell as construction dipped (pic: Terry Murden)

Economic growth in Scotland is expected to remain subdued in 2020, according to new research.

PwC’s latest UK Economic Outlook projects growth of 1.3% in Scotland this year, down 0.3 percentage points from July’s projection, but ahead of the 1.2% expected across the UK. Growth next year is projected to fall back to 1%, in line with the UK and significantly below the UK’s long-term average rate of around 2%. 

GDP fell by 0.2% in Scotland in the second quarter of the year, largely because of a dip in construction output and new data suggests year-on-year growth in the second quarter of 0.6%.

The latest Economic Outlook also reports that UK GDP could be boosted by 4% – or £83 billion – if local areas with below-average productivity levels could make up even half of the gap.

The report examines UK regional productivity, revealing wide variations in domestic productivity per job, as well as from an international perspective. PwC concludes that UK output per worker is around 10-15% behind Germany, France and Sweden and more than 30% behind the US.

In terms of economic growth, only London and the South East are expected to grow at a faster rate than Scotland this year, while next year the ongoing economic uncertainty caused by Brexit will see growth fall across all 12 nations and regions measured by PwC.

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