It's spring, so where are the green shoots?

welder Image copyright Thinkstock

There may be one positive that comes out of the negative number issued on Wednesday morning by the Scottish government.

With a decline of 0.2%, October-to-December output from the Scottish economy certainly grabs attention - because if there's another quarter of contraction, it's called recession.

Recessions are not the end of the world as we know it. Indeed, an absence of recessions would break with the world as we know it. The economic cycle is just that - a cycle that tends to deliver slowdowns. Australia is the only major country in modern times to have avoided recession for decades.

But they are harder to explain where one's close neighbours are not facing the same downturn. So that gap with the UK numbers is hard to explain away, or to ignore.

There's nothing can be done to avert recession for Scotland now, because the quarter in question - January to March - has just ended. We can only know we're in recession long after it's started, and usually after it's ended. Confirmation of recession, or not, is scheduled for 3 July.

Flat services

The figures give us a bit more understanding of what has been going on in the economy, but often raise more questions than leave clear answers.

They show services flat in the final quarter of the year, and that constitutes three-quarters of the economy. Over the year, these figures point to stagnant public sector services. It's hard to count the output of health and education, but on this count, they hardly shifted.

The strongest performers were financial services and, even moreso, firms classified as technical, scientific and administrative support services.

Construction has fallen from an elevated high in its measure of output over the past three years - a factor that has kept Scotland out of recession in past quarters.

Within the production sector, there are some particularly steep falls. Manufacturing is down 8% in two years, textiles by more.

Metals and machinery is down 24% in two years. It plays a big role in the supply chain for the oil and gas sector.

The category including computer equipment has fallen 6% since 2013, and 44% since the start of the century. That was roughly when we stopped talking about Silicon Glen.

Even food and drink - held up as the big hope for production and exports - saw output fall slightly from 2015 to 2016.

Image copyright Thinkstock

Overall, if you compare the end of 2016 with the final three months of 2015, the economy is producing the same amount. It's stalled, while the UK economy is reckoned to have grown 1.9%.

If you add up the four quarters of 2015 and compare them with the four quarters of 2016, you get to the anaemic growth rate of 0.4%, while the UK economy is up 1.8%.

How does that compare with other economies? While Scottish output stalled, the US was up 2% between December 2015 and December 2016, the Eurozone up 1.7%. Developing economies grow faster. India was up 7% and China by nearly as much.

Closer comparators to Scotland include Ireland, bouncing back from the depths with 7.2%, and Iceland doing likewise, with a bumper 11.3% growth. Norway saw 1.8% growth, not helped by the oil and gas downturn either. Sweden and Denmark saw 2.3% growth.

Down in the doldrums with Scotland was Russia on 0.3% growth. Those over-dependent on oil revenues, as well as those afflicted by war, dominate the list of those with contracting economies: Brazil continued a nightmare contraction with 2.5% less output last year, and Venezuela has gone hideously wrong, down 18%.

Sentimental Scots

The numbers for the final quarter of 2016 make it hard to argue that the downturn has been all about the oil and gas slump, because the stalled, becalmed and contracting bits of the economy are much more widely spread.

A boost from the weakening of the pound after the June referendum is not clear. Export sectors have not performed as might have been expected. And the service sector - representing three-quarters of the economy - has been flat.

So what has changed that might explain this? The Scottish government looks to Brexit uncertainty. Its newly-commissioned measure of consumer sentiment tanked after the referendum - less for individual household expectations than for expectations for the economy as a whole.

I asked finance secretary Derek Mackay - he was on a life science business visit just after the results came out - why Scotland is feeling the Brexit effect any differently from the rest of the UK.

Perhaps Scots are better informed about what Brexit entails, he suggested. Perhaps it's because they are more pro-Europe, and therefore feel the loss of that trading relationship more keenly.

Perhaps so, but something more than that has to be going on. What else could that be? The distinctive parts of the story in Scotland include the low business start-up and growth rates, the lack of corporate headquarters in the country, and relatively poor research and development spending by businesses.

Some blame over-dependence on the public sector. With a squeeze on spending, there could be a proportionately bigger effect for a country with a bigger public spend.

There are issues of being at the periphery of Europe, though that doesn't seem to be holding back Ireland or Iceland.

A more subdued (and sensible?) property market releases less equity to homeowners on which they can borrow to spend and invest more.

Plus, yes, there's politics. If Brexit is pinpointed as the key source of uncertainty which has hit consumer confidence and thus hit economic growth, I asked the finance secretary if the prospect of another independence referendum is a help or a hindrance to the economy.

The answer: independence can be good for the economy. Even the debate about independence can, he says, be a positive.

Image copyright Reuters

Meanwhile, release of the latest Gross Domestic Product figures brings to mind the debate about how much statistics can be trusted, when they are based on survey evidence, on what economists can infer and impute, on educated guesses, and seasonal adjustment to smooth out volatility.

There's a lively debate (some well-informed, some not) on whether the Government Expenditure and Revenue Scotland (GERS) figures can be trusted.

In 2013 and 2014, they were trusted as the basis for the economic case made in the Scottish government's independence white paper. With less oil and gas revenue changing fiscal circumstances, they're a lot less helpful to the cause now.

So what does the finance minister think, given that it's his part of the Scottish government that compiles them?

"GERS is a range of estimates," he tells me. "A number of the statistics are based on estimates. I don't believe GERS is the starting position of an independent Scotland. It's a reflection of where we are now.

"So I'll take those statistics at face value. But that's separate to the argument we can have about what you could do with the economic levers of an independent nation, where we could make different choices. I accept the estimates as they are, but I think we could do so much better."

So if they're a reflection of where we are, are they an accurate reflection?

"In terms of the statistics available between the UK government statistics, the ONS (Office for National Statistics) and what the Scottish government produces, yes, they are accurate," says Mr Mackay. "But they are an accurate assessment of estimates of where we are right now - not the starting position of an independent Scotland."

The next set of GERS figures, covering the financial year which ends within a few hours of me writing this, is due for publication around August.

More on this story