I am a little late with this: a week in New York escaping just before Sandy hit, then a lot of hard pressured writing to get my contribution into the Commentary and catch-up on postponed family responsibilities, meant no time for blogging.
Things won't get much better this week because I have still got a lot of work to catch up on.
Anyway, the latest Commentary sponsored by PwC is here and my podcast - if you can stomach it! - is here.
We have revised down our forecasts as growth remains weak, with negative growth now expected this year (-0.1%) but positive and stronger growth in 2013 of 1.3%, then 2,2% in 2014. This is slightly better than the median of the latest forecasts for the UK of -0.3%, 1.1% and 1.9%, respectively.
Clearly, any forecast must be viewed sceptically but one reason why we think Scotland might do a little better than the UK is that the data seem to suggest that labour productivity in Scotland has held up better than the UK and may have actually risen.
The following chart shows the change in output and employment in Scotland and UK relative to the pre- (2008-2009) recession peak.
It is quite clear from this chart that labour productivity per worker has fallen in both Scotland and the UK. This is because the drop in output in relation to the pre-recession peak is much greater than the drop in jobs. Moreover, the deterioration in worker productivity appears to be much less in Scotland, with jobs 2 percent and GDP 4.4 percent below the peak. In the UK jobs are almost back to their previous peak, while GDP is nearly 4 percent below.
But look at this next chart.
Total hours worked are more than 6 percent below their pre-recession peak in Scotland while GDP is 4.4 percent below. This suggests that productivity per hour worked must have risen. Yet, in the UK total hours are just 1.4 percent below the peak while GDP is nearly 4 percent below.
We try and offer some explanation for the difference in the Commentary. But we don't really know if it is a measurement issue, or a real difference. If the difference is real, and we have used official statistics, then something has changed in Scotland's labour market compared with the UK. This might mean improved competitiveness here. There again it might not.
Watch this space!
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