Sluggish in Scotland's undergrowth

"Economic growth sustained" headlined the Scottish government media statement.

And so it has been. It's been sustained at the same very low level seen in the previous quarter.

July-to-September saw Gross Domestic Product rise by 0.1%, the same rate as April-to-June.

Given that the population is growing, the per capita growth was flat, as it was in the previous two quarters.

That is: in the first nine months of last year, there were more of us, but on average, we weren't getting any better off.

Over the second and third quarters of 2015, UK growth was 1%. That is five times as fast as Scotland. And the indications from the final quarter of the year are that the gap is not going to be closed (we'll find out on 6 April.)

Six minutes after the GDP figures were published, an email arrived in my inbox from the SNP group at Westminster.

It flagged up a debate on the economy, in which MPs were going to claim that "George Osborne is failing on key economic indicators".

That may be true as well. But we are still unclear what has been going wrong closer to home than the UK Treasury.

Grampian effect

The simple answer is: oil and gas. The sharp fall in the oil price has become a further fall, and an expectation of a prolonged low price, perhaps dipping far lower.

The past two days have seen the price flirt with falling through the $30 threshold, and forecasts of $20 per barrel of Brent crude (that was Goldman Sachs), then to $16 (with a very gloomy global outlook from the Royal Bank of Scotland), and even to $10.

It is striking that the talk this time last year, as oil fell in only seven months from $115 to $45, was that there would be a balancing effect from parts of the economy that buy energy rather than produce it.

That would include motorists spending the extra change when filling up the car, and industrial consumers of oil, with enhanced profits.

For Scotland, it doesn't look that way now. Yes, it's been tough for Aberdeen and the north-east. This week, we've seen Scottish new car registrations fall last year, while the UK had record sales - the decline entirely explained by the Grampian effect.

Aberdeen Airport saw passenger numbers last year fall 7%, while Edinburgh and Glasgow saw healthy growth. Hotel occupancy and rates in the north-east have plummeted.

However, we've found also that the offshore sector's supply chain stretches further than some supposed, particularly in engineering, but reaching across many more sectors. And business confidence has barely picked up in the energy-burning sectors.

Part of the explanation for low growth is shared with the rest of the UK, notably in manufacturing.

Exporters have been weighed down by the strength of sterling. And those non-exporters who compete with importers have had the same pressure.

The recent rise in US Fed interest rates has led to sterling weakening against the dollar, which may help those exposed to trade competition.

But there's more going on than that. The statistics from the Scottish government point to problems with the transport and communications sector. In the first nine months of last year, it appeared to contract 2.4%.

Manufacturing contracted 2.3% in the full year. Within that, metals and machinery was down nearly 20% in one year, and 8% in the most recent quarter.

Building growth

There were better performers over the year, including the category that covers tourism, and moreso in utilities.

Gas and electricity grew in output by 2.3% in the year to July/September, and in water supply and waste services, the number was up 8%.

The star performer has been construction, up 17.3% over the year, though the most recent quarter's figures show the benefit of big public infrastructure projects has begun to weaken.

The Scottish government can take some credit for that construction boom, with roads, rail and a big bridge over the Forth. Construction fared much less well south of the border.

Such growth was never going to be sustainable under current budget constraints, but it was essential to keeping Scotland out of recession in the middle of last year.

Repair bill

The government statisticians have added some new detail on what has been behind that, with total construction output in the year to the third quarter of 2015 at nearly £12bn.

In the year to the third quarter of 2015, there was a £2.5bn infrastructure spend, rising by 53% on the previous year.

New public housing spend was £469m, according to these calculations, up by 26%. New private homes were at more than three times that level - nearly £1.5bn - but growing at only 3%.

Repair and maintenance of infrastructure was up 20% at £800m, while housing repairs were up 15% at £1.53bn.

That is the best informed guess of the statisticians. But there are question marks over the data. The numbers do not isolate the role of oil and gas in the economy.

And public finance expert John McLaren points out that construction employment has not risen with output in the sector.

He suggests that it might be because workers in that sector are not Scottish-based. In that case, the benefit of employing them is being felt closer to their homes and not in the Scottish economy.

To cover that anomaly, with an increasingly mobile workforce, McLaren suggests we also need to see Gross National Product, or GNP.

That is the figure that accounts for the inflow of income from Scots who work and invest outside the country, as well as the outflow of non-Scottish workers and companies based elsewhere, who take their wages and profits home.

Patchy data

Taking the longer view, McLaren points to transport and communications, which has fallen in output by 10% since 2007, while in the UK, it is up 12%.

The value of output from the tourism industry (or at least hotels and restaurants) is lower than it was in 2007, yet the UK figure is up 8.5%.

The data is patchy in what it captures. And covering a small country rather than the UK, it is bound to be more vulnerable to statistical error.

But using the numbers we have, the sluggish recovery takes on an odd shape when you peer down into the sectors.

And they show the oil price is far from being the only explanation for the under-performance of the Scottish economy.