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Economic commentary

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Economic commentary

Our bi-monthly update on global, UK and Scottish economic trends and performance, drawn from a wide range of economic indicators and commentaries. Published August 2019.

Global growth softening and uncertainties increasing

Forecasts have been revised downwards in almost all major economies. Eurozone economy grew by to 0.2% in Q2 2019. The eurozone is Scotland’s largest export market so continued growth is welcome news for Scottish exporters.

Main factors contributing to the slowdown 
  • Rising trade barriers
  • Brexit uncertainty
  • Subdued investment and consumer demand

Global economic trends

  • Global growth forecasts have been downgraded
  • Growth in the US, the world’s largest economy, slowed in the second quarter of 2019 to 2.1%

Growth forecasts (%)









United States



Euro area









United Kingdom




Table 1 showing global economic growth forecasts. Sources: IMF World Economic Outlook, July 2019

UK economic trends

  • Growth in the UK contracted by 0.2% in Q2 of 2019

Scottish economic trends

  • Scotland’s GDP growth was 0.5% in the first quarter of 2019, in line with the UK
  • Scottish unemployment rose slightly over the 3 months to June 2019 but fell over the year to a rate of 3.6%, lower than the UK rate (of 3.9%). Employment rates remain high at 75.4%.
  • Account managed companies reported weaker performance in terms of profits over the last 6 months
Figure 1 Summary of headline indicators

Figure 1 Summary of headline indicators

What our customers tell us

We regularly seek feedback on current performance and expectations from our account managed companies.

Feedback was received from approximately 50 companies in July 2019.

Turnover, employment and export performance over the last six months were strong. Performance in terms of profitability, however, was less strong with only 38% of respondents reporting an increase. 

Figure 2 showing company performance over the last six months (% of companies)

Figure 2 showing company performance over the last six months (% of companies)

Companies expect strong performance over the next six months and the expectations for future profitability are higher.

Figure 3 showing company performance over the next six months (% of companies)

Figure 3 showing company performance over the next six months (% of companies)

What all this means for Scottish Enterprise and Scottish businesses

Political uncertainties and instabilities are the theme this month, and there are clear signs that global economic growth is slowing. This is impacting negatively on Scottish business confidence and performance, particularly in the manufacturing sector.

Forecasts of global growth are more pessimistic over the rest of 2019 and trading conditions are likely to become less favourable for Scottish businesses operating in some overseas markets. Slower growth in these markets may negatively impact on both exporters and potential inward investors despite the ongoing weakness of sterling.

Domestically, growth in the UK and Scotland has been subdued and, as Brexit uncertainty continues, most economic commentators have downgraded their UK and Scottish forecasts for the remainder of this year and into 2020.

However, these are signs of resilience amongst Scottish companies.

Growth opportunities will be in:

  • expanding as much as possible overseas, gaining from the low value of the pound
  • driving productivity through innovation, increased efficiency and competitiveness


We release Scotland's economic commentary bi-monthly. This commentary reflects our understanding of issues at the time of writing drawn from a wide range of credible and respected sources and should not be taken as Scottish Enterprise policy.

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