The bald statistics show that GDP rose by 0.5% in Scotland in the quarter, while falling by -0.3% in the UK. However, growth in 2012 - calendar year - was at 0.3% identical in both Scotland and the UK.
The position of Scotland and the UK in terms of the recovery of GDP from recession is shown in the chart below.
Scottish GDP stands at -2.4% below its pre-recession peak, slightly better than the position of UK GDP, which is -2.9% below its pre-recession peak. So, still a long way to go before the economy gets back to where it was, in GDP terms in early 2008.
There are two key factors that are complicating the assessment of the GDP performance of Scotland and the UK, both absolutely and relatively, during 2012. The first is the differential impact of the London Olympics. The second is the consequences of declining oil and gas production.
To a certain extent the weak performance of the UK economy in quarter four was a reflection of the temporary boost given to GDP by the Olympics in quarter three. If we look at the growth in GDP between quarters two and four in Scotland and the UK, we see that Scottish GDP rose by 0.8% while UK GDP rose by 0.6%. So, when we smooth out the effect of the Olympics the performance of Scotland and the UK is much closer.
But then there is the complicating factor of oil and gas production which - offshore production - is included in the UK GDP data but not in the Scottish data. Removing oil and gas production gives us the following chart.
Now once declining oil and gas production is removed, which incidentally would have lowered measured GDP growth in an independent Scotland, we find that both Scotland and the UK grew by 0.8% between the second and fourth quarter. Scottish and UK growth is identical.
Once that is done, we see that UK GDP is -1.9% below its pre-recession peak compared to -2.4% for Scotland. So, we can conclude that the recovery continues to be weak in the UK and a little weaker still overall in Scotland.
One hope of the UK Government and many commentators is that the UK economy will recover from the Great Recession by re-balancing away from domestic demand to external or foreign demand, from consumption to investment, and from public to private production. A key factor in this is the desired shift in favour of manufacturing, which is a major exporter. The latest data show that very little progress is being made here as the next chart shows.
However, it is some small comfort that Scottish manufacturing is doing better than UK manufacturing. But the downturn in the fourth quarter in Scottish manufacturing as well as in UK manufacturing takes some of the shine off the good overall Scottish GDP performance in the fourth quarter.