Prosperity performance proves mixed for Scotland
Scotland saw a drop in prosperity over the last year, reflecting uneven rates of growth in affluence across the UK, according to the third edition of the annual UK Prosperity Map from Barclays Wealth & Investments.
Against a backdrop of fluctuating economic conditions and Brexit negotiations, the 2017 UK Prosperity Map shows that, while most areas of the UK are more prosperous overall than last year, Scotland recorded a fall in its ranking despite a rise in average earnings and GDP per capita.
The UK Prosperity Map uses factors including numbers of millionaires, average earnings, business growth rates, house prices, and GDP per capita to generate a unique ‘Prosperity Index Score’ for each UK region and city.
John Godfrey, Director, Barclays, Wealth & Investments, Scotland: “The last twelve months have seen fluctuations in the UK and Scottish economies, and this is reflected in the mixed picture of prosperity growth across the country in this year’s Prosperity Map.
“It’s encouraging to see that people in Scotland are benefiting from falling unemployment and higher earnings and that we have retained our GDP ranking, delivering the fourth highest per capita in the UK. Household spending is up but some measures like house prices are showing slower growth than the rest of the UK.
“Interestingly, business birth-to-death ratios appear to indicate reduced start-up activity. Our entrepreneurial community play a key role in wealth generation. While in recent years Scotland has developed a strong support network for start-ups with organisations like Barclays offering tailor made services for high-growth businesses and entrepreneurs, we need to continue to innovate and invest in creating a positive environment for growth.”
Growth in Scottish household expenditure and GDP
Despite uncertainty in the wider economic and political landscape over the last year, several macroeconomic indicators have seen widespread positive growth: GDP per capita increased in every region, recording a 1.8% rise in Scotland £23,685 – the fourth-highest in the UK.
A 1.5% increase in Scottish household expenditure reflected the rise in average earnings - up 2.5% to £27,032 resulting in the third-highest earnings outside London and the South East.
A survey conducted alongside the Prosperity Map research, shows that consumer spend in Scotland has risen by 9% year-on-year but is 5% lower than the average UK spend.
The number of millionaires calling Scotland home has remained steady at 30,500 adults.
Some measures, however, have impacted overall prosperity. House prices lag behind the rest of the UK, rising just 2% in the last year, while Scotland’s business birth-to-death ration dropped 0.03% year on year to 1.33, the lowest in the UK.
Paul Swinney, Principal Economist, Centre for Cities, commenting on the research, said: “Overall, this year’s UK Prosperity Map shows that the Greater South East is still outperforming the rest of the country economically, based on its ability to attract in high-skilled business investment. While other areas of the country have benefited from falling unemployment, rising prices have softened the positive impact of increased wages. This research illustrates the need for the Government’s forthcoming industrial strategy to address the barriers that currently prevent over parts of the country generating prosperity for their residents that is seen in the south-eastern corner of England.”