PwC’s latest UK economic outlook (UKEO) projects growth of about 1% for the two regions, lagging behind the rest of the country.
Scotland’s outlook is forecast to pick up the following year with a 0.2% boost in performance to 1.2% but it will remain lower than the UK average of 1.6%
Elsewhere, looking at other economic factors, the Scottish labour market showed faster employment growth than six of the 12 UK regions during 2017, in line with the UK average of 0.6%.
Over the same period, Scotland recorded the highest house price growth of 7.7%, the best performance in the UK and more than three times that of London.
Meanwhile, regional comparisons of key sector areas over the past two decades revealed Scotland’s manufacturing contribution has declined while it had the third highest increase in professional, technical and scientific services’ contribution to gross value added (GVA).
Lindsay Gardiner, regional chair at PwC in Scotland, said: “The latest UKEO presents a mixed picture for Scotland.
“While our economic performance is expected to pick up next year and we’ve enjoyed steady employment growth during 2017, the analysis also shows that Scotland is the only area of the UK not to grow its manufacturing contribution over the past two decades.
“The analysis of ONS data suggest that there is a positive relationship between relative regional GVA growth rates and education and skills, business formation rates and employment in professional and technical services.
“Regions reliant on public-sector employment have grown more slowly while employment alone is not a proxy for productivity or regional prosperity.”