Long-awaited springtime for Scotland's economy?

Even weaker sectors in Scotland such as construction have seen some growth

Much media attention may be on a funeral in London, but let's not overlook some surprisingly positive news about the Scottish economy.

I'll leave others to ponder the irony of it, or perhaps the link to Margaret Thatcher's legacy. But if we look at this downturn, the most recent output and job figures are looking good.

The bigger surprise is in the growth of Gross Domestic Product (GDP), up by 0.5% in the fourth quarter of 2012.

That's the same quarter that UK GDP was falling by 0.3%, and when much of the survey data about business performance and confidence on both sides of the Tweed was very downbeat.

Scottish job figures were less surprising, but no less welcome. While the UK number seeking work between December and February was up by 70,000, it fell in Scotland by 11,000.

That takes the jobless rate to 7.3% in Scotland, but at UK level, it's at 7.9%.

Moreover, while the UK figure is rising above 2.5 million, the Scottish figure has fallen below the psychologically helpful 200,000 level for the first time since 2009.

Look at the reverse side of the employment coin, and you'll see Scotland was also doing the best of any nation or region in the UK, with the number of those in work rising by 39,000, to more than 2.5 million.

UK job creation, which has outstripped Scotland by a wide margin, seems to have stalled after a prolonged improvement, according to this latest data.

Even the weaker sectors in Scotland have seen some growth, including construction. And this morning, we got an unusually upbeat assessment of last month's business from the Scottish Retail Consortium.

Olympic feel-good

So what's been going right for Scotland? As ever, the data isn't good enough to be sure. But it may help to see things in the longer perspective of last year.

The figures from the earlier parts of last year reflected a big lift to the UK economy that wasn't seen in Scotland - a lot of it possibly explained by the Olympics in London, and accompanying feel-good factor.

That effect may now be getting unwound, as the British economy otherwise stays flat. But not having enjoyed that boost mid-year, Scotland may be seeing a winter lift to catch up a bit with the UK position.

The offshore oil industry is among sectors which have been leading the way in growth

The data tells us that, over the whole of 2012, the UK and Scottish economies grew by the same amount: 0.4%. And there's still some catching up to do. Scotland's 2008-09 recession was not as deep as the UK's but it's recovered less quickly.

Where there is most growth is in energy, in offshore, to a lesser extent in renewables and in utilities. Scottish Power is saying it could create 2,500 more jobs, though it's angling for the regulator to give it fast-track approval for its grid upgrade plans if these jobs are to become a reality.

There are quirks in here. As the Centre for Public Policy for Regions has pointed out, the measure of output for the health sector suggests it's contributed to UK growth by 15.4% in five years, but only by 4.3% in Scotland. "The reasons for this growth differential are unknown," say the Glasgow economists.

Then there's our old chum, offshore oil and gas. It has seen a sharp decline in production in the past two years, despite a rise in investment. Due to an unexpected shutdown in major fields, it took 0.2% out of UK production in the final quarter of last year. Without that, the economic contraction would have been only 0.1%.

But because Scotland doesn't have offshore production added to its numbers, that effect isn't to be seen. Whitehall number-crunchers have calculated that if Scottish accounts did include the country's geographical share of offshore production, then the fourth quarter would have seen decline of 1.5% instead of a rise of 0.5%.

You can surely guess the political point they're making, about Scotland's relative vulnerability to volatility.

Confidence

So is this a sign of confidence finally getting into the Scottish economy? Not if this is merely catching up on the poorer performance earlier last year.

Nor if the signals from the rest of the UK are so weak on output and jobs (the GDP figures for the first quarter of this year are due out next week). Scottish confidence requires confidence from its main markets, and the market south of the border is a very important one.

Nor is confidence likely to return if wage figures are any guide.

The December to February data suggests very weak wage growth. These cover the whole of the UK. And if you take out bonuses, it's the weakest since current records began in 2001. As it's lagging price inflation, that's a continued squeeze on household income.

With exports struggling, it's hard to sustain growth from a squeezed household sector.

But at least there is momentum growing behind five months of improving job figures, and it's in the right direction.