| 8 industry |
|
| General |
| 8.1 This section deals with the economic
accounts for Scotland. Gross domestic product (income-based), gross domestic fixed capital
formation, consumers’ expenditure and personal disposable income for Scotland are
part of the system of UK Regional Accounts produced by the Office for National Statistics,
and published regularly in Economic Trends (December and April editions). A fuller
description of the sources and methods is given in "CSO Regional Accounts - Studies
in Official Statistics No 31" published by HMSO in 1978. Some details of the methods
have been revised in recent estimates, in particular the calculation of profits for
manufacturing industries in GDP. "Methods used to compile regional accounts",
published by EUROSTAT in 1984, also gives some details. A brief note on the current
procedure is given below. The latest estimate within each series is provisional; those for
other years are also subject to revision. |
|
| Domestic Supply of
Products |
| 8.2 The domestic supply of products presented
in table 8A1 is presented as an aggregate form of the Input-Output balance for Scotland in
1994. Input-Output balances provide a complete picture of flows of products in the economy
for a given year. They give a fully articulated analysis of the economy illustrating the
relationship between producers and consumers and the independence of industries. The
balance shows the purchases of those products used in the production process, and
reconciles the output, income and expenditure measures of Gross Domestic Product. |
|
| Gross domestic product
(income-based) |
| 8.3 Estimates of Scottish gross domestic
product at current prices in table 8A2 are produced as part of a model which provides
estimates for all standard regions of the United Kingdom and the continental shelf. The
estimates of GDP for Scotland and other Regions of the UK are based on the "factor
incomes" method as used in the National Accounts. This approach first breaks the
total down into broad components outlined in the following paragraphs. Each broad
component is further broken down by the Standard Regions of the UK. |
| 8.4 Income from employment: there are 2 main
sources of data which provide estimates of wages and salaries. Data on total wages and
salaries are based on a 1 per cent sample from the Department of Social Security (DSS)
national insurance records. This provides a breakdown by standard regions of the UK. The
industry breakdown (excluding agriculture, hunting, forestry and fishing) is derived from
a combination of employment and average earnings’data; the latter is based on the New
Earnings Survey. These 2 sets of estimates are combined in such a way as to provide
estimates of wages and salaries by region and industry, constraining the industry totals
for each region to the DSS total for that region, and the total for each industry to the
UK National Accounts totals. Data which are not yet available, eg for the most recent
year, are projected from previous years. There are additions to cover for agriculture
etc., and the income of UK forces, and components of income from employment other than
wages and salaries (e.g. employers contributions). |
| 8.5 Income from self-employment: estimates of
self-employment in agriculture including agricultural rent, were provided by The Scottish
Office Agriculture, Environment and Fisheries Department and were based on detailed
estimates of output and expenditure. All other self-employment income is by region and by
industry on the basis of the results of the Survey of Personal Incomes. |
| 8.6 Gross trading profits and surpluses: this
component includes the trading profits of companies and the surpluses of the public
corporations and public enterprises, and the surpluses arising from local
authorities’ trading activities. Estimates of gross trading profits and surpluses
pose conceptual problems as well as problems of data availability. Estimates for
industries outside the manufacturing sector were mainly derived by allocating a Scottish
share of United Kingdom gross trading profits on the basis of employment shares (broken
down by industry groups). Exceptions occur in one or two cases where more accurate figures
for surpluses are available and were used in preference. Annual Census of Production data
were used to allocate profits within manufacturing. |
| 8.7 Rent: there are several components of
rent; the rent of private dwellings, of local authorities, of central government, and of
business. The imputed charge for consumption of non-trading capital is included. These
components are estimated using (as far as possible) the same sources and methods that are
used to produce the United Kingdom estimates for National Accounts. |
|
| Gross domestic fixed
capital formation (GDFCF) |
| 8.8 GDFCF covers the production industries
and agriculture, forestry and fishing, transport and communication (excluding sea and air
transport) and dwellings. Investment by construction, distribution, sea and air transport,
public and private service industries, and transfer costs of land and buildings are not
covered. Manufacturing investment figures were derived from the net capital expenditure
data from the Annual Census of Production, but excluding expenditure on land and existing
buildings for consistency with the analysis by industry in the National Accounts. The
estimate of GDFCF in private dwellings includes estimates of the total expenditure on
improvements to private dwellings, plus renovations by housing associations and
expenditure by private landlords and developers on the improvement of existing dwellings. |
|
| Net capital expenditure:
manufacturing industries |
| 8.9 Net capital expenditure covers new
building work, land and other building acquisitions, new or second hand vehicles, plant
and machinery, less disposals of land, buildings, vehicles, plant and machinery. It
differs from gross domestic fixed capital formation by the inclusion of land and existing
buildings. The source data for net capital expenditure is the Annual Census of Production. |
| 8.10 All tables in this section were prepared
by The Scottish Office Education and Industry Department, from data provided by the Office
for National Statistics. |
|
| Index of production and
construction |
| 8.11 The Index of Production and Construction
in table 8B1, provides a measure of output in the manufacturing, energy and construction
industries in Scotland, in real terms (i.e. at constant prices). It is scaled so that the
index value for each industry in 1990 is 100. The industries included in the Index are
identified by the 1992 Standard Industrial Classification as divisions C-F, which
accounted for approximately 36 per cent of the total gross domestic product in Scotland in
1990. |
| 8.12 The Index is published as a Press
Release each quarter by the Scottish Office Education and Industry Department. The
principal source of data for the Index is Office for National Statistics (ONS) inquiries,
such as the Monthly Production Inquiry, which are conducted at a company level. These
inquiries, together with information at industry level from other Government Departments
and other organisations, provide data on around 320 industries or parts of industries. |
| 8.13 In principle, the Index measures changes
in real net output of each industry (ie the value of total output less the cost of
materials, fuels and services purchased). These values are weighted according to the
relative contribution made by each industry to the total GDP for all manufacturing
industries in 1990. However, this information is not usually available on a quarterly
basis, so gross output figures are therefore used as a proxy. For most industry series in
the Index, sales or production values or volumes are used as an indicator of gross output.
These value series are then converted into an index, deflated to 1990 prices, and then
seasonally adjusted. |
|
| The Scottish Production
Database (SPD) and Annual Census of Production (ACOP). |
| 8.14 The Scottish Production Database (SPD)
contains data on employment, output, purchases and investment within the Scottish
manufacturing industries. Data can be classified according to industry group, geographical
area and country of ownership. SPD is constructed based on survey returns from the Annual
Census of Production (ACOP). |
| 8.15 ACOP is a survey of UK production
industries carried out annually by the Office for National Statistics (ONS). ACOP survey
forms are sent to all manufacturing units with over 100 employees, half of all units with
50-99 employees are sent a survey form and a quarter of all units with 20-49 employees.
ONS then make estimates for the units which did not return their form or which were not
included in the survey. UK results from ACOP are published in Business Monitor - PA1002. |
| 8.16 The Scottish extract of the survey
returns are sent by ONS to the Scottish Office Education and Industry Department (SOEID)
in a computerised form. In this case, SOEID create estimates for the missing units.
‘Average per head’ factors are produced for each variable. These are applied to
employment figures for the missing units. Separate factors are produced according to
industry, sizeband, region and country of ownership to give the most accurate estimates
possible. Thus, SPD contains actual or constructed returns for every manufacturing unit in
Scotland. |
| 8.17 SOEID also make small revisions to the
ACOP data to take account of additional information which has become available since the
survey was conducted. This might come from other ONS enquiries or directly from companies. |
| 8.18 Productivity is defined here as Gross
Value Added per head and investment as Net Capital Expenditure per head. Definitions of
these and other variables included in the tables are provided in PA1002. |
| 8.19 Data from SPD are in current prices,
which do not take account of inflation, and so direct comparisons between years are not a
meaningful method of assessing change. |
|
| CBI Industrial Trends |
| 8.20 The Confederation of British Industry
survey was launched in 1958 and was initially carried out three times a year; from 1972 it
has been quarterly (published in January, April, July and October). The survey is designed
to give a broad indication of trends in manufacturing industry. The number of firms
responding to the Scottish survey averaged about 92 in 1997. Replies are weighted
according to the firm’s size and industrial classification. The weights were last
updated in 1990, the previous updating was in 1984. Results are summarised by aggregating
replies and expressing them as (weighted) percentages of the total number of respondents.
Some of the results are displayed in table 8B5. |
