Scottish Economic Statistics 2004

B3 chapter three: Industry Sectors

Introduction

This chapter provides information on various sectors of the economy - agriculture, fisheries, manufacturing, energy, construction, services and tourism.

Scottish Annual Business Statistics

In previous Scottish Economic Statistics publications, the Scottish Executive published business statistics which were compiled from the Office for National Statistics' (ONS) Annual Business Inquiry (ABI) company returns. It used its own methodology to produce Scottish estimates. However, ABI statistics are now produced under new partnership procedures agreed between ONS and the Scottish Executive. These have resulted in:

An improvement in the quality of the underlying data
Consistency in the figures used by ONS and Scottish Executive
Scottish Executive figures available 3 months earlier than in previous years

In this chapter, the service sector is referred to for simplicity, but the figures quoted only relate to those sectors covered by the ABI. Broadly, this excludes the financial sector and some of the public sector. For more detailed information, please visit the following web site: http://www.scotland.gov.uk/about/ELLD/EI/00016170/Introduction.aspx

Trends and Comparisons

In 2002, turnover in the sectors covered by the Annual Business Inquiry in Scotland amounted to 149 billion. Of this, 84 billion related to services, 35 billion to manufacturing, 13 billion to oil & gas and 10 billion to construction. The two industries making the largest contributions to these totals were both in the services sector, retail at 18 billion and wholesaling at 16 billion. ( See Table 3.1).

Gross value added (GVA) is a measure of the income generated by businesses after the subtraction of input costs, but before costs such as wages and capital investment are paid prior to arriving at figure for profit. Between 1998 and 2002, GVA in the manufacturing sector fell by 1 billion (8%). In the same period, GVA increased in the construction sector by 0.9 billion (27%) and also rose in the services sector by 6 billion (25%). ( See Table 3.3 & Chart 3.1).

The largest GVA figure in manufacturing is in the food & drink industry (2.2 billion). In services, the other business activities sector (which includes accounting, labour recruitment, industrial cleaning etc.) has the largest GVA total (5.4 billion).

Gross value added per employee (a measure of productivity) in the manufacturing sector is around 75% greater than that found in the service sector. In part this reflects the higher level of part time working in the service sector.

Labour costs per employee are around 35% lower on average in the service sector compared to the manufacturing sector. Within manufacturing, the highest costs can be found in manufacture of other transport equipment (34,300 per employee) whilst the lowest can be found in manufacture of textiles (16,800 per employee). Within services, labour costs are highest in computer & related activities (37,000 per employee) and lowest in hotels & restaurants (7,700 per employee), a sector where there is a high level of part-time working.

Renfrewshire, Glasgow City and Fife are the local authority areas with the highest gross value added in the manufacturing sector. In the services sector, the highest gross value added can be found in Glasgow City, Edinburgh City and Aberdeen City. Within manufacturing, Falkirk has the highest labour costs (31,300 per employee) whilst Aberdeen City has the highest costs in services (19,600 per employee).

Chart 3.1: Shares of gross value added by sector in 1998 and 2002

Time series data on Scottish manufacturing

Chart 3.2 was created from a historic dataset containing a consistent time-series of around half a dozen key financial and employment variables. The time-series includes data from 1950 to 2002, converted where necessary to a Standard Industrial Classification 1992 basis. A certain amount of estimation was inevitable during conversion. It is therefore anticipated that the series will be of most use in graphical form to look at long-term trends, rather than looking at specific values for specific years. The other charts available in this series can be found on the Internet at the following website address: http://www.scotland.gov.uk/about/ELLD/EI/00016170/Introduction.aspx

Chart 3.2: Manufacturing sector - gross value added per employee, 1976-2002

Box 3.1: Focus on the Construction Sector in Scotland
The construction sector is an important sector in the Scottish economy. It is defined by Standard Industrial Classification (SIC) category 45. The sector's share of Scottish GDP in 2000 was 5.8 per cent, which was similar to the contribution of the retail sector and more than financial services, transport, food, drink & tobacco, or electrical & instrument engineering. Between 1998 and 2002, Gross Value Added (GVA), a measure of the sector's contribution to the economy, grew from 3.5 billion to 4.1 billion in real terms (2002/03 prices), an annual average growth rate of 3.7 per cent. This contrasts with manufacturing, where GVA declined by 4.2 per cent per year over the period. Chart 3A shows the contributions of the construction sector's components to its value added in 2002.
Chart 3A: Construction sector shares of GVA, 2002
More recently, output in the construction sector grew by 1.2 per cent in the first quarter of 2004, and by 8 per cent year on year, significantly outperforming most other sectors in the economy. However, since 1998 the sector has grown by 1.5 per cent on average each year, slower than the economy as a whole (1.8 per cent). This is the result of significant volatility over the period, as shown in Chart 3B.
Chart 3B: Construction component of GDP, 1998 - 2004
Labour productivity, measured by GVA per employee, has also increased markedly in real terms: from around 25,500 per employee in 1998 to 33,500 per employee in 2002. This represents an annual average growth rate of over 7 per cent per year during the period. These figures contrast with those for manufacturing, which despite having higher levels of labour productivity, saw GVA per employee grow by just 1 per cent per year on average. Output in the sector is sensitive to business and consumer confidence, both of which help shape real estate investment decisions. As a result, employment is also sensitive to these factors. Between Spring 1998 and Spring 2004, the Labour Force Survey (LFS) reveals that construction employment grew by 2 per cent per year on average, significantly higher than the rate for the Scottish economy as a whole (0.9 per cent per year on average). However, quarterly data reveals a greater degree of volatility in construction employment than for the economy as a whole, reflecting the seasonal nature of the sector and its high proportion of self-employment. The most recent LFS data (Spring 2004) reveals that construction employment stood at 196 thousand, representing 8.2 per cent of the Scottish workforce. One area in which the sector differs from most others of the Scottish economy is in the degree of self employment. Over 41 per cent of construction enterprises in 2003 were registered as having no employees, compared to around 37 per cent for the economy as a whole. Other small enterprises (those with between 1 and 49 employees) comprised around 56 per cent of the total, while medium firms (between 50 and 249 employees) constituted 1.7 per cent and large firms (more than 250 employees) made up 1 per cent of the total. Small enterprises (with between 0 and 49 employees) play a much larger role in this sector than tends to be the case in the economy as a whole. Small construction enterprises were responsible for 52 per cent of employment and 42 per cent of turnover in 2003, compared to 36 per cent of employment and 29 per cent of turnover in the economy as a whole. Correspondingly, large enterprises have a less significant role in construction than tends to be the case in the economy overall. Large enterprises were responsible for 30 per cent of employment and 41 per cent of turnover in construction in 2003, compared with 50 per cent of employment and 57 per cent of turnover in the economy as a whole. The construction sector also has a strong influence on other sectors through purchases made by this sector in Scotland. Employment supported by the sector's Scottish purchases can be estimated using the Input-Output tables for 2000, which track the linkage patterns for Scottish industries. It is estimated that, in 2000, approximately 57,600 Full Time Equivalent (FTE) jobs in other sectors were dependent on purchases of inputs or services by the construction sector. The sectors with the largest dependencies are shown below.
Table 3A: Main Industries with Employment Related to Construction Sector Activity
Input-Output category	Description	Number of jobs related to construction (FTE)
114	Other business services	12,190
112	Architectural activities and technical consultancy	5,470
100.1	Banking	5,260
106	Renting of machinery	4,830
94	Other land transport	2,960
Source: 2000 Scottish Input-Output Tables and Multipliers Construction remains an important component of the Scottish economy in terms of the direct and indirect output and employment it supports. The sector is markedly different from others in the Scottish economy, especially in terms of the composition of employment, as there is a high degree of self-employment.

Creative Industries

In recent years there has been increased interest in looking at the outputs and characteristics of groups of businesses which do not necessarily fit into the Standard Industrial Classification (SIC) system usually used to categorise businesses. One such grouping is creative industries.

The Department for Culture, Media and Sport (DCMS) has defined creative industries via a selection of SIC codes. In some cases all businesses coded under a specific industry are included (e.g. all businesses within advertising (SIC 74.4) are considered to be part of the creative industries sector). In other cases only a proportion of businesses are included (e.g. 25% of businesses within architecture (SIC 74.2) are considered to be part of the creative industries sector). Further details of the definitions can be found on the DCMS website. ( http://www.culture.gov.uk/global/research/statistics-outputs/creative+-industries-eco-est.htm)

Table 3.7 shows that the creative industries employed around 52,000 people in Scotland in 2002, and this has remained reasonably constant since 2000. The software and computer services sector contributes more employees (16,000) to the total than any of the other sectors.

Creative industries generated 5.1 billion of turnover in 2002, an increase of 23% since 2000. Gross value added increased by 21% to 3.0 billion over the same period. Both gross value added per employee (57,200) and labour costs per employee (25,700) are relatively high in the creative industries, compared to the average over all sectors covered by the Annual Business Inquiry (34,500 and 17,300 respectively).

An article in the next edition of Scottish Economic Report will look at the clustering of creative industries in specific local authority areas within Scotland.

Tourism

Two national surveys provide the main data on tourism: the UK Tourism Survey, which asks UK residents about trips they have made, and the ONS International Passenger Survey, which surveys visitors to the UK at the point of exit from the UK. A quality review of tourism statistics, in which the Executive has participated has been published in the summer of 2004 at http://www.statistics.gov.uk/methods-quality/quality-review/transport.asp. The Scottish Executive is currently undertaking a detailed analysis of the impact of tourism expenditure on the economy (see the article on Tourism Satellite Account).

An analysis of data relating to Scotland from the above surveys for 2003 can be seen in Table 3.8.

In 2002, tourism related industries ¹⁷ provided employment in 216,000 jobs. Note that all employment in the selected industries is included in the analysis, not only the part attributable to tourist expenditure. The Tourism Satellite Accounting approach described in article A.2 provides the opportunity to focus the analysis more precisely on employment dependent on tourist expenditure in all sectors of the economy.

Chart 3.3 compares jobs in tourism related industries with all Scottish jobs, using data from the Labour Force Survey 2003. The chart shows that tourism employees are predominantly female, compared to the rest of the workforce they comprise more part-time workers, and more young workers. Fewer have a higher educational qualification or are in the managerial, professional or associate professional category. More than half have held their current job for less than three years. Most of these characteristics are also apparent for the UK tourism industry, the exception being that Scottish tourism employees seem to be better qualified: 21% of them had a higher educational qualification (not necessarily in tourism subjects) compared to only 15% in the UK as a whole.

Chart 3.3: Characteristics of Employment in Tourism Related Industries 2003

Table 3.1: Total outputs and costs by industry,1 2002

Division (SIC92)	Description	No. of -Local Units	Total Turnover m	Purchases of goods and services m	Gross Value Added at Basic Prices m	Net Capital Expenditure m	Total Labour Costs m
ALL	TOTAL	145,530	149,440	94,790	54,900	8,960	27,530
1.4/1.5	Agriculture (hunting and related services activities only)	1,450	40	20	20	0	10
2	Forestry, logging and related service activities	900	220	180	90	10	*
5	Fishing	1,910	520	380	180	40	*
10	Mining of coal and lignite; extraction of peat	60	*	*	*	*	50
11	Extraction of crude petroleum and natural gas service activities etc.;	270	*	*	*	*	1,000
13	Mining of metal ores	0	*	*	*	*	*
14	Other mining and quarrying	280	*	*	*	*	*
15	Manufacture of food products and beverages	1,410	6,540	4,130	2,200	300	1,010
17	Manufacture of textiles	520	820	510	310	30	200
18	Manufacture of wearing apparel; dressing and dyeing of fur	240	370	240	120	10	80
19	Manufacture of leather and leather products	30	100	*	20	0	10
20	Manufacture of wood and of products of wood	690	*	*	*	*	170
21	Manufacture of pulp, paper and paper products	160	1,210	830	380	50	220
22	Publishing, printing and reproduction of recorded media	1,460	1,530	850	690	60	410
23	Manufacture of coke, refined petroleum products and nuclear fuel	40	*	*	*	*	80
24	Manufacture of chemicals, chemical products and man-made fibres	260	3,230	2,260	960	130	490
25	Manufacture of rubber and plastic products	360	1,140	720	420	30	260
26	Manufacture of other non-metallic mineral products	490	680	390	290	40	180
27	Manufacture of basic metals	150	530	380	150	10	100
28	Manufacture of fabricated metal products, except machinery & equipment	1,750	1,800	1,020	800	60	540
29	Manufacture of machinery and equipment nec	860	2,010	1,210	820	60	520
30	Manufacture of office machinery and computers	110	4,930	*	1,570	*	260
31	Manufacture of electrical machinery and apparatus nec	300	790	520	290	10	210
32	Manufacture of radio, television and communication equipment & apparatus	170	2,420	*	510	40	300
33	Manufacture of medical, precision & optical instruments, watches & clocks	350	1,410	870	550	*	390
34	Manufacture of motor vehicles, trailers and semi-trailers	130	480	390	90	*	100
35	Manufacture of other transport equipment	200	1,690	960	750	*	410
36	Manufacture of furniture; manufacturing nec	890	660	420	240	20	150
37	Recycling	110	120	80	40	10	20
40	Electricity, gas, steam and hot water supply	160	*	*	*	*	*
41	Collection, purification and distribution of water	350	*	*	*	*	*
45	Construction	14,000	10,290	6,310	4,060	230	2,480
50	Sale, maintenance & repair of motor vehicles & motorcycles; retail sale of automotive fuel	5,530	9,100	7,740	1,490	180	690
51	Wholesale trade and commission trade, except of motor vehicles & motorcycles	7,830	16,430	13,000	3,060	250	1,430
52	Retail trade, except of motor vehicles & motorcycles; repair of personal & household goods	26,510	18,040	13,670	4,440	660	2,280
55	Hotels and restaurants	14,090	4,410	2,270	2,160	410	1,240
60	Land transport; transport via pipelines	3,750	3,100	1,810	1,520	260	850
61	Water transport	190	*	*	110	*	*
62	Air transport	90	*	*	300	*	*
63	Supporting and auxiliary transport activities; activities of travel agencies	2,100	4,580	3,110	1,070	380	740
64	Post and telecommunications	1,800	3,660	1,570	2,150	410	1,020
70	Real estate activities	4,920	1,810	860	1,100	610	340
71	Renting of machinery and equipment without operator & of personal & household goods	1,810	1,210	480	740	180	270
72	Computer and related activities	5,740	2,200	960	1,290	90	960
73	Research and development	270	430	280	150	30	230
74	Other business activities	20,600	9,230	3,780	5,380	500	3,400
80	Education	1,510	1,050	760	290	220	1,490
85	Health and social work	3,430	840	280	570	100	580
90	Sewage and refuse disposal, sanitation and similar activities	230	930	330	610	250	200
91	Activities of membership organisations nec	2,060	470	260	210	30	170
92	Recreational, cultural and sporting activities	5,450	4,610	2,520	2,050	220	720
93	Other service activities	7,560	1,150	600	550	70	340

Source: Office for National Statistics, Annual Business Inquiry, (Compiled by Scottish Executive)
Notes: 1. Annual Business Inquiry coverage excludes certain areas such as the financial sector and some of the public sector.
* Denotes disclosive data.

« Previous | Contents | Next »

The Scottish Government

Statistics

On this page: