Trade flows north, a lot less south

Warm, humorous, gutsy, sparky, soulful, determined and fun.

If Scots were to be seven dwarves, that's what they might be called. (Until the nation's cynics get to work, of course.)

Instead, they are the attributes with which Scotland's tourism agency is seeking to engage Scots and their spirit in making the country more attractive to visitors.

There's a lot to do if VisitScotland and the industry are to hit an ambitious target. And it's one of the sectors that needs to succeed if Scotland is to turn around a formidable rise in its trade imbalance.

The trade imbalance may not matter much, so long as Scotland is tied into the pound and part of the UK.

But it is a useful indicator of economic health, and rather important to those who want to see another independence referendum.

The Scottish government's figures for the whole Scottish economy have just been published, to cover the third quarter of last year, up to September.

They show that, between July and September, Scots sold £6.1bn of goods and services overseas. They imported £5.1bn. That's a trade surplus, while the UK as a whole is running some very large external trade deficits.

So that can't be bad for Scotland. But what about trade within the UK?

Scots sold goods and services worth £10.4bn in the third quarter to the people of England, Wales and Northern Ireland. The flow coming the other way was rather larger: £15.2bn.

Prosperity and jobs

The trade deficit with the rest of the UK rose to £14bn in 2014, from an economy with total output of nearly £140bn.

John McLaren, a keen observer of these numbers, who used to work for Public Finance Scotland, observes that the first nine months of last year saw that deteriorate sharply.

Roughly £750m less was being sold to the rest of the UK, and £750m more was being bought from it.

The fall in sales success to this dominant market, McLaren points out, has real implications for prosperity and jobs.

Imbalance ballooned

Exports and imports, overseas and to the rUK, combined to reach a deficit in the third quarter of £4.25bn, the highest quarter on record.

When the fourth quarter figures are published, the annual total is probably going to be above £15bn.

The previous record was as recession struck in 2008, at just under £12bn. And it would mean that the imbalance has ballooned by £6bn since 2013.

Barrels and therms

McLaren has been looking at another angle on this, illustrated by these most recent statistics - the relative position of Scotland and the rUK in total output, or Gross Domestic Product (GDP).

The third quarter saw that rise by 0.6%, after falling in the first half of the year.

What, then, if Scotland were to have a geographical share of offshore oil and gas? Surely that would help? Well, no, it would show GDP falling by 0.8%, due to the falling prices of barrels and therms.

GDP per head, with oil, was 1% lower than the rest of the UK. Two years ago, it was 6% higher.

Foreign profits

A more positive take on the figures is that GDP per head in the year to September was £26,400. And when a share of oil and gas is added, that rises by £2,100.

The catch is that much of that money is flowing out of the country in profits. There is no reliable measure of how much.

A more relevant measure of its value to the public is in oil revenue, and the third quarter figures show that might amount to £21m in the third quarter, down from £2.7bn only four years before.

It doesn't reassure to find that the savings ratio for Scottish households, as implied by these figures (how much income is set aside to save or pay off debt), has also fallen - from 8.1% of household income in 2014 to 5.8% in the third quarter, and 6.2% over the first nine months of 2015.

That points to household budgets under some stress.