SPICe Briefing
SPICe KEY ECONOMIC INDICATORS FIONA MULLEN AND SIMON WAKEFIELD
This briefing provides a snapshot of some of the latest economic indicators for Scotland. It provides data on GDP (including comparisons with OECD countries and a summary of independent Scottish forecasts), analysis of the Scottish labour market and the latest export figures.
Scottish Parliament Information Centre (SPICe) Briefings are compiled for the benefit of the Members of the Parliament and their personal staff. Authors are available to discuss the contents of these papers with MSPs and their staff who should contact Fiona Mullen/Simon Wakefield on extension 85087/85372 or email [email protected] or [email protected] Members of the public or external organisations may comment on this briefing by emailing us at [email protected]. However, researchers are unable to enter into personal discussion in relation to SPICe Briefing Papers. Every effort is made to ensure that the information contained in SPICe briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes.
www.scottish.parliament.uk 1
briefing 22 March 2005 05/17
Summary of Key Indicators Indicator
Trend
Further data
Total GDP
Rising
Figure 1 and Tables 1 and 2
(Over the year to 2004 Q3 Scottish GDP rose by 1.8 per cent and by 0.9 per cent in the third quarter of 2004 (seasonally adjusted).) Manufacturing GDP
Fluctuating
Table 2
(a 1.1% decline over the latest quarter to Q3 2004, though against a backdrop of 0.4% growth over the most recent full year) Scottish growth forecasts
Continued growth
Tables 3 and 4
(ranging from 1.9% to 3.0% for 2004, but below the projected UK growth rate for 2005 and 2006) Employment
Rising slowly (slight year on year increase in total employment around the 2.4 million mark. Increases in banking /financial services and public administration etc. Decline in manufacturing employment.
Unemployment
Falling slowly (marginal annual fall in claimant count and ILO unemployment to Feb 05)
Exports
Decline in manufactured exports
Figures 5, 6, 10 and 11 Tables 7, 9 and 10
Figures 7, 8 and 9 Tables 8 and 9 Figures 13, 14, 15 and 16
(reduction of 33% in manufactured exports over last three years. Table 11 Decrease of 6% in year to 2004 Q3)
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Output Figure 1: Gross Value Added in Scotland and UK (Chained volume measures at basic prices, 1998 = 100, source: Scottish Executive 2005) 120.0
UK 115.0
Scotland 110.0
105.0
100.0
95.0
90.0
1998
1999
2000
2001
2002
2003
2004
Figure 1 above illustrates part of the story of Scottish economic growth (in terms of the Gross Value Added measure). The Scottish economy has grown steadily, but at a slower rate than that for the UK as a whole. From the first quarter of 1998 to Quarter 3 2004, the Scottish economy grew by 12.5%, compared to growth of 18.2% for the UK economy. Over the year to 2004 Q3, Scottish GDP rose by 1.8 per cent and by 0.9 per cent in the third quarter of 2004 (seasonally adjusted). The UK figures show that GDP rose by 3.2 per cent over the year to 2004 Q3 and by 0.5 per cent over the latest quarter.
Sources of Scottish and UK GDP growth Table 1: Average quarterly GDP growth rates (percentages) (Source: Fraser of Allander 2005) 1998 Q1 to 2000 Q3
2000 Q4 to 2004 Q3
1998 Q1 to 2004 Q3
Scotland
0.48
0.44
0.46
UK
0.82
0.54
0.64
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Analysis by Professor Brian Ashcroft (Fraser of Allander 2005) of the Scottish and UK GDP data over this period points to some of the underlying causes of differential Scottish and UK growth rates. Two distinct phases of growth are identified, from 1998 to 2000, and from 2000 to present, representing the periods before and after the peak of the electronics sector in Scotland. Table 1 above indicates the Scottish and UK growth rates in these two periods. The analysis indicates that Scottish GDP growth was about 70% of the UK level over the period, and that business services/ real estate was the single most significant source of growth for both Scotland and the UK (see also figure 2 below highlighting the 2000 to 2004 period). Figure 2: Absolute sectoral contributions to Scottish and UK growth 2000 (Q4) to 2004 (Q3); weighted quarterly average (Fraser of Allander 2005) -0.2 -0.15 -0.1 -0.05
0
0.05
0.1
Public sector
0.15
0.25
0.21
Manufacturing -0.16
0.3
0.15
0.09
Business services and real estate
0.26
-0.03 0.06
Retail and wholesale Transport
0.05 0.02
Construction Other services
0.03
Finance
0.03
0.02 0.03
Hotels and catering Agriculture
0.12 0.09
0.06 0.07 0.07
Scotland
-0.02 -0.03
Utilities and mining
FS adjustment
0.2
0
UK
0.01
-0.09 -0.07
Figure 2 above indicates that in the 2000 to 2004 period the ‘public sector’ was substantially more significant to Scottish growth than for the UK, whilst conversely retail/wholesale contributed more to UK growth than Scottish. However, perhaps the clearest ‘story’ from the graphic above is the impact of the manufacturing (and in particular the electronics) recession on overall Scottish growth. The decline of the manufacturing sector led to an average quarterly reduction in growth of 0.16 percentage points.
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Table 2: Manufacturing Gross Value Added (Source: Scottish Executive 2005) Scotland 1998 to 2004 Q3 2001 = 100 Manufacturing Industries
Manufacturing
SIC 2003
D
2001 weights3
Refined Chemicals & Metals & Engineering Food, Drink Textiles, Total Other Petroleum Man-made Metal and Allied & Tobacco Footwear, ManuProducts & Fibres Products Industries Industries Leather & facturing Nuclear Fuel Clothing DD,DE,DH, DF DG DJ DK,DL,DM DA DB,DC DI,DN
175
2
15
16
63
33
8
39
101.8 103.8 104.8 100.0 91.6 90.4 91.1 90.9 89.9
103.9 108.6 103.6 100.0 110.2 117.3 123.0 128.3 127.9
89.3 92.9 88.0 100.0 101.3 93.8 89.4 88.6 87.0
115.6 106.7 100.9 100.0 95.4 93.1 90.0 94.1 96.5
100.0 108.9 116.0 100.0 82.9 81.6 83.7 82.7 80.5
99.1 97.7 95.7 100.0 98.6 100.8 103.8 103.2 102.7
132.1 119.2 113.0 100.0 86.8 82.1 81.2 80.0 77.0
103.6 102.7 103.5 100.0 94.7 93.9 93.9 93.6 93.4
Percentage change, latest quarter on previous quarter -1.1 -0.3 -1.8 Percentage change, latest 4 quarters on previous 4 quarters
2.6
-2.7
-0.4
-3.8
-0.2
0.4
-0.6
1.7
3.4
-4.7
-0.8
1998 1999 2000 2001 2002 2003 2004
Q1 Q2 Q3
8.2
-6.1
1. Gross Value Added (GVA) is also referred to as Gross Domestic Product (GDP) at basic prices 2. Estimates cannot be regarded as accurate to the last digit shown
Data available online. A more detailed analysis of the GVA figures for Scottish manufacturing is provided in Table 2 above. The rise and fall of the ‘engineering and allied industries’ (including electronics) is clearly shown. Only textiles/footwear/clothing has fallen by a greater proportion since 2000, and as the ‘2001 weights’ indicate this was a much smaller sector. Indeed, the figures above disguise the collapse of the electrical and instrument engineering sector, which peaked at an index point of 126.0 in 2000 (Q3) before declining to its current index point of 73.6, more than a 40% decline in GVA over four years.
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Economic growth in OECD countries Figure 3: Growth in Gross Domestic Product (volumes) on 4 quarters to 2004 Q3 compared with previous four quarters (Figures collated by Scottish Executive)
Ireland South Korea United States New Zealand Greece Australia Czech Republic Mexico Major Seven (G7) UK (Market) Sweden Japan Spain Finland Belgium Norway Canada France Denmark EU15 Eurozone Italy Germany Netherlands Portugal UK (Basic) Scotland (Basic)
5.4% 4.9% 4.6% 4.3% 4.0% 4.0% 3.8% 3.5% 3.3% 3.0% 3.0% 2.9% 2.7% 2.6% 2.5% 2.4% 2.3% 2.0% 1.9% 1.9% 1.6% 0.9% 0.9% 0.8% 0.7% 3.2% 1.8%
Figure 3 above provides an international context for Scottish growth rates. The OECD country GDP figures above are calculated on the basis of ‘market prices’. Scottish data is not, however, available at market prices. The Scottish figures are provided at ‘basic prices’ meaning that direct like-for-like comparisons with other OECD countries are not possible. Basic prices calculations exclude taxes less subsidies on products (taxes on products include VAT and excise duties). For comparative purposes UK GDP growth at market prices was 3.0%, and at basic prices was 3.2%. Despite the limitations of the data, the above analysis does point towards the latest year’s Scottish GDP growth being not far from the European average, sitting above that of countries such as the Netherlands and Portugal, but well below countries such as Ireland, New Zealand and Greece.
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Economic Forecasts Table 3: Independent forecasts of GDP growth 2004 - 2006: Scotland and UK (1) (2) Forecasts collated by Scottish Executive and provided to SPICe 2004
2005
2006
Scotland UK Scotland UK Scotland UK Fraser of Allander Institute (February 2005)
2.0
3.1
1.7
2.6
1.5
2.5
ITEM Club (Dec 2004)
2.3
3.2
1.8
2.8
1.8
2.5
Experian Business Strategies (November 2004)
1.9
3.1
2.4
2.8
2.6
2.8
Cambridge Econometrics (August 2004)
3.0
3.1
2.7
3.1
2.1
2.5
Note: 1. FAI and ITEM Club produces forecasts for GDP, whereas CE and EBS produce forecasts of GVA. Note: 2. Source for FAI’s UK forecast: National Statistics, National Institute Economic Review, 191, January 2005 and "Forecasts for the UK economy", HM Treasury, November 2004 and January 2005.
The four independent forecasters above all estimated that GDP growth in the Scottish economy exceeded its ‘long run average annual growth rate of 1.7%’ in 2004. (This compares with a long run average growth rate of 2.2 per cent for the UK). With the exception of the Experian forecast growth is expected to slow in 2005 and 2006. In all cases Scottish GDP is expected to continue to grow more slowly than the UK. Table 4: Forecasts for the UK economy HM Treasury February 2005, Forecasts for the UK Economy a comparison of independent forecasts, http://www.hmtreasury.gov.uk/media/1AB/1A/forecast_feb2005.pdf
Independent forecasting institutions continue to project steady growth for the UK economy over the medium term to 2009. Inflation is expected to remain low and claimant unemployment to reduce slightly.
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Federation of Small Businesses (FSB) “Index of success 2005” Figure 4: the FSB Index of Success (Federation of Small Businesses 2005)
Some recent comment and debate has considered the value of using the ‘traditional’ indicator of GDP or economic growth as the prime measure of success of a nation. Partly in response to this concern, the Federation of Small Businesses recently developed a “composite indicator that would allow us to better judge Scotland’s success or failure as a nation, based on wealth, equality, health and future potential compared to 23 other OECD nations”. The summary chart is reproduced above in figure 4. Scotland lies towards the bottom end of the ‘success table’, at 17th out of 24. Behind the composite figures Scotland performs better on employment and student literacy, slightly below average in terms of GDP per capita and very poorly in terms of life expectancy.
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Employment Figure 5: Employee job estimates by industry (seasonally unadjusted) (Source: Office for National Statistics, accessed via NOMIS February 2005)
Number employed
700000
600000
Public Admin, Education and Health
500000
Distribution, hotels and restaurants
400000
Banking, finance and Insurance
300000
Manufacturing
200000
Construction
100000
Agriculture and Fishing Jun-04
Dec-03
Jun-03
Dec-02
Jun-02
Dec-01
Jun-01
Dec-00
Jun-00
Dec-99
Jun-99
Dec-98
Jun-98
Dec-97
Jun-97
Dec-96
Jun-96
Dec-95
0
Time period
•
•
•
•
Over the 2 year period Sep 2002 - Sep 2004, the financial services sector experienced an increase in employment of 8.4% from 379,057 employees in 2002 to 410,933 employees in 2004 Manufacturing employment has continued to decline over the entire period. As at September 2004, there were an estimated 237,000 manufacturing employees in Scotland. This is an 12.1% decrease since the same period in 2002 (270,000) Distribution, hotels and restaurants also saw virtually no change in the estimates of employment year on year (-0.8%) from September 2003 to 522,000 employees in September 2004. However, there was a seasonal increase (+3%) in estimates of employment from 527,000 in September 2003 to 542,000 in December 2003. This fell back by March 2004 to 522,000, rising again in June 2004 to 527,000. The sectors that saw an estimated annual increase were public administration, education and health; banking, finance and insurance; and construction. From September 2003 to September 2004, public administration, education and health experienced an increase in the number employed from 609,000 to 624,000 (an increase of 2.5%). Construction saw an estimated increase in the number employed from 143,000 to 147,000 (an increase of 2.7%). Banking, finance and insurance saw an estimated increase in the number employed from 395,000 to 411,000 (an increase of 4.1%)
Labour Market data available online. providing research and information services to the Scottish Parliament 9
Employment by Industry Figure 6: Composition of the Scottish workforce – September 2004, unadjusted (Source: Office for National Statistics, accessed via NOMIS February 2005) Public administration, education & health 29% Other services 6% Banking, finance and insurance, etc
Agriculture and fishing 1%
18% Energy and water 2% Manufacturing 10%
Construction 6%
Transport and communications 5%
Distribution, hotels and restaurants 23%
Figure 6 shows the proportions of estimated employment attributed to each industry. It can be seen that nearly a third of all employment is estimated to be in public administration, education and health (29%). This is up 2% of the total proportion since June 2004. The other two main providers of employment are distribution, hotels and restaurants (23% - down 1% since June 2004) and banking, finance and insurance etc (18% - up 1% since June 2004), followed by manufacturing (10% - down 1% since June 2004). (N.B.. It should be noted that the % changes over the three month period may be attributable to the data being seasonally unadjusted)
Over three quarters of Scottish employment is accounted for by service sector industries. Further analysis of the type of employment across these sectors is provided in Table 7 below • •
•
Three industries include a significant proportion of part time jobs - public administration (38%), distribution (48%) and finance (24%) In each of these three sectors, a large proportion of all employees are female, with women accounting for 73% of employment in public administration etc, 54% of employment in distribution etc and 49% of employment in finance etc However, with the exception of public administration, in every industry males have significantly higher proportions of full time employment than females. For example, even though females account for 54% of total employment in distribution etc, 32% of providing research and information services to the Scottish Parliament 10
employment in this industry is full time males in comparison to 20% of employment being full time females. Table 7: Industry Employment Categorised by Full Time/Part Time and Male/Female Workers (September 2004) (Source: Office for National Statistics, accessed via NOMIS February 2005) Public admin, education and health
Distribution hotels & restaurants
Banking, finance & Insurance, etc
Manufacturing
TOTAL
624031
521947
410933
FT- NUMBER
384925
272248
PT- NUMBER
239106
FT - % of total PT - % of total
Sep 2004 (latest figures)
Construction
Transport and comms
Agriculture and Fishing
237475
146492
121706
31685
311459
219453
139417
105127
25133
249699
99474
18022
7075
16579
6552
61.68
52.16
75.79
92.41
95.17
86.38
79.32
38.32
47.84
24.21
7.59
4.83
13.62
20.68
Male FT
144270
166625
185304
168436
123733
85266
21005
Male PT
24754
70878
23650
4401
1805
8077
3313
Female FT
240655
105623
126155
51017
15684
19861
4128
214352
178821
75824
13621
5270
8502
3239
23.12
31.92
45.09
70.93
84.46
70.06
66.29
3.97
13.58
5.76
1.85
1.23
6.64
10.46
38.56
20.24
30.70
21.48
10.71
16.32
13.03
34.35
34.26
18.45
5.74
3.60
6.99
10.22
Female PT Male FT- % total Male PT- % total Female FT- % total Female PT- % total
of of of of
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Unemployment Figure 7: Unemployment by Local Authority Area (Annual Scottish Labour Force Survey 2003/04, Scottish Executive/Office of National Statistics)
Unemployment rate (% of economically active)
10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0%
West Lothian
Eilean Siar (Western Isles)
Stirling
South Ayrshire
South Lanarkshire
Renfrewshire
Perth and Kinross
North Lanarkshire
Moray
North Ayrshire
Midlothian
Inverclyde
Highland
Fife
Glasgow City
Falkirk
Edinburgh, City of
East Lothian
East Renfrewshire
East Dumbartonshire
Dundee City
East Ayrshire
West Dumbartonshire
Dumfries and Galloway
Clackmannanshire
Argyll & Bute
Scottish Borders, The
Angus
Aberdeenshire
Aberdeen City
Scotland
0.0%
Local Authority Area
•
•
• • • •
Based on the International Labour Organisation (ILO) definition, according to the Annual Scottish Labour Force Survey, there were 145,000 people aged 16 or over unemployed in 2003/04 (5.8% of the economically active population) In terms of Local Authority Areas, Perth and Kinross had the lowest unemployment rate (2.4%), with North Ayrshire and North Lanarkshire being the highest at 9.2% and 9.5% respectively In terms of the major cities, Aberdeen (3.6%) and Edinburgh (5.5%) experienced much lower rates than Glasgow (8%) and Dundee (8.2%) Data was unavailable for the Orkney Islands and the Shetland Islands Table 8 below shows the actual number of unemployed by Local Authority Area Table 9 below indicates in November-January 2005, the employment rate was 74.1% (an decrease of 1.1% since the previous data release in September - November 2004). Some 78.6% of the working age population in November-January 2005 is described as being “economically active” (in employment or unemployed, a decrease of 1.1% since the previous data). Of the 669,000 economically inactive, some 450,000 are described as not wanting a job, with 220,000 wanting a job providing research and information services to the Scottish Parliament 12
Table 8: Unemployment by Local Authority Area (Annual Scottish Labour Force Survey 2003/04, Scottish Executive/Office of National Statistics)
Local Authority Area Proportion Level Scotland 5.8% 145,000 Aberdeen City 3.6% 4,000 Aberdeenshire 4.4% 5,000 Angus 5.7% 3,000 Argyll & Bute 5.4% 2,000 Scottish Borders, The 3.1% 2,000 Clackmannanshire 6.4% 1,000 West Dumbartonshire 8.1% 4,000 Dumfries and Galloway 4.7% 3,000 Dundee City 8.2% 5,000 East Ayrshire 7.2% 4,000 East Dumbartonshire 3.3% 2,000 East Lothian 4.4% 2,000 East Renfrewshire 4.4% 2,000 Edinburgh, City of 5.5% 13,000 Falkirk 3.9% 3,000 Fife 5.1% 9,000 Glasgow City 8.0% 21,000 Highland 4.4% 5,000 Inverclyde 7.7% 3,000 Midlothian 4.6% 2,000 Moray 5.6% 2,000 North Ayrshire 9.2% 6,000 North Lanarkshire 9.5% 14,000 Orkney Islands * * Perth and Kinross 2.4% 2,000 Renfrewshire 4.9% 4,000 Shetland Islands * * South Ayrshire 6.0% 3,000 South Lanarkshire 6.1% 9,000 Stirling 5.8% 3,000 West Lothian 4.7% 4,000 Eilean Siar (Western Isles) 4.3% 1,000
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Table 9: Key Labour Market Statistics (Source: Office for National Statistics, Labour Market Statistics March 2005, Scotland, seasonally adjusted unless otherwise stated)
Rate (%) 74.1
Change on year (level) 3
Change on year (rate) -0.4
Employment
Nov 04 - Jan 05
Level (Thousands) 2,394
Unemployment
Nov 04 - Jan 05
145
5.7
-4
-0.2
Economically Active
Nov 04 - Jan 05
2,539
78.6
-1
-0.6
Economically Inactive:
Nov 04 - Jan 05
669
21.4
19
0.6
Of which, not wanting a job
Nov 04 - Jan 05
450
35
Of which wanting a job Civilian workforce jobs (unadjusted) Claimant count (seasonally adjusted)
Nov 04 - Jan 05
220
-17
Sep 03
2,522
7
Feb 05
96.1
Date
3.6
-3.6
-0.1
Data available online. Figure 8: Unemployment Rates: UK Comparisons (Labour Force Survey Quarterly data Unemployment rate (%) of working age people - Seasonally unadjusted – NOMIS) N.B. LFS quarterly data is not as robust for regional data. Where possible, the Annual Scottish Labour Force Survey data should be used for Scottish figures. The labour force survey (LFS) is a quarterly sample survey carried out by interviewing people about their circumstances and work. it is the biggest regular household survey in this country and provides a rich and vital source of information about labour force using internationally agreed concepts and definitions. The quarterly LFS dataset on Nomis is not seasonally adjusted. 10
8
7
6
Unemployment rate (%)
9
England
Scotland
Wales 5
Dec 2003-Nov 2004
Jun 2003-May 2004
Dec 2002-Nov 2003
Jun 2002-May 2003
Dec 2001-Nov 2002
Jun 2001-May 2002
Dec 2000-Nov 2001
Jun 2000-May 2001
Dec 1999-Nov 2000
Jun 1999-May 2000
Dec 1998-Nov 1999
Jun 1998-May 1999
Dec 1997-Nov 1998
Jun 1997-May 1998
Dec 1996-Nov 1997
Jun 1996-May 1997
Dec 1995-Nov 1996
Jun 1995-May 1996
Dec 1994-Nov 1995
Jun 1994-May 1995
4
Time Period
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•
The latest Labour Force Survey quarterly data (seasonally unadjusted) shows that the unemployment rate as a percentage of all working age people was 5.8 % in Scotland in the period December 2003 – November 2004.
•
Since the period Dec 2002 – November 2003, the quarterly unemployment rate for Scotland has remained stable, fluctuating only between 5.8% and 5.9%. Before this period, there had been a continual decline in Scotland’s unemployment rate from 6.8% in June 2001 May 2002 to 5.9% December 2002 - November 2003
•
Scotland’s latest unemployment rate of working age people, at 5.8%, is higher than both England and Wales which both have rates of 4.7% during the same period.
•
The unemployment rates (as a percentage of working age people) have been following a declining trend for all 3 regions of the UK, over the period 1995 – 2004
•
There appears, however, to be more variability in the unemployment rates over the time period for both Scotland and Wales. This could be due to the smaller sample sizes involved.
•
It could also be noted that over almost the entire period, England has had consistently lower unemployment rates than Scotland and Wales. From the period June 2000-May 2001, Wales has also experienced continuously lower unemployment rates than Scotland.
Figure 9: Claimant Count Unemployment in Scotland (1983 – 2004): Office of National Statistics, seasonally adjusted. Data for each year taken for the month of December Claimant Count 400000
300000
250000
200000
150000
100000
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
50000 1983
Number of people unemployed
350000
Year (month = Dec)
•
In December 2004, claimant count unemployment stood at 86,043 people in Scotland providing research and information services to the Scottish Parliament 15
•
The Claimant Count unemployment level has been in continuous decline since 1992, where in December of that year the number of people claiming unemployment related benefits was 251,774. So there has been a 65.8% decrease in the level of claimants since 1992. See the box below which explains the claimant count unemployment measurement, and its limitations
UNEMPLOYMENT MEASUREMENTS (Source: Office of National Statistics 2002) Official estimates of unemployment are produced by ONS and are based upon the ILO (International Labour Organization) definition. The claimant count measures how many unemployed people are claiming unemployment-related benefits. There is a difference between the two series, and although they move broadly in line often one measure increases while the other falls. The reason for this is the difference in what they measure. Unemployment is a count of jobless people who want to work, are available to work, and are actively seeking employment. The ILO definition is used internationally, so comparisons between countries can be made, and it also allows for consistent comparisons over time. Unemployment is calculated using data from the Labour Force Survey (LFS), so it is subject to sampling differences. The claimant count measures only those people who are claiming unemployment-related benefits (Jobseeker's Allowance). It is always the lower measure because some unemployed people are not entitled to claim benefits, or choose not to do so. Benefits rules vary over time and between different countries, so it is more difficult to make comparisons. The claimant count comes from the administrative records of Jobcentre Plus (formerly Employment Service), and is available earlier than the LFS-based unemployment data. The difference between the two measures is wider for women than for men. Currently fewer than half of unemployed women claim unemployment-related benefits compared with around three quarters of men. Unemployment data are available in their current format back to 1984 (non-seasonally adjusted and seasonally adjusted). The present seasonally adjusted claimant count series goes back to 1971, and is adjusted to allow for significant changes to benefit rules.
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Economic (In)Activity Figure 10: Economic Activity rates: Scotland and the UK (Local Area Labour Force Survey March 2003 – Feb 2004. Accessed via NOMIS on 15 February 2005) 90 80
Economic Activity Rate (%)
70 60
Scotland
50 40
United Kingdom
30 20 10 0 All aged 16+
All of working age
Aged 16-19 Aged 20-24 Aged 25-34 Aged 35-49 Aged 50+
Aged 50Over retirement retirement age age
Age group
The Local Area Labour Force Survey (LALFS) is the preferred source of data for sub-regions for the following reasons: The LALFS estimates are based on a larger sample, which includes the LFS boost surveys, so gives estimates that are more reliable. The quarterly dataset sample does not include the boost surveys, so its estimates are less reliable. The LALFS contains a much wider range of variables. However, the disadvantage of the LALFS is that its results are not as timely as the quarterly dataset. Where timeliness is very important, the new quarterly LFS dataset can be used to provide more up-to-date estimates, but remember that these will be less reliable. Only use the old unreweighted quarterly LFS dataset when data prior to 2000 are required. Although this dataset contains data from 1992 to autumn 2003, the post-2000 data should only be used if comparison with earlier years is essential. In particular, note that LFS data from this dataset will be inconsistent with all other LFS outputs released by ONS (via Nomis and all other dissemination routes).
Figure 10 indicates that Scotland has lower rates of economic activity than the UK as a whole in the 50+ years categories. However, in all other age groups, Scotland has the same, if not higher rates of economic activity than the UK. Table 10 below shows that: •
Scotland’s economic activity rate of all working age people was 78% in March 2003 – February 2004. This was the same rate as the UK as a whole, but was lower than providing research and information services to the Scottish Parliament 17
England’s activity rate at 78.5%. Wales however had a lower rate at 74.2% of the working age population. •
When all people aged 16+ were taken into account, Scotland had a slightly lower economic activity rate (62.1%) than the UK as a whole (62.5%). England had the highest economic activity rate of all people aged 16+ at 62.9%
•
Scotland had the highest economic activity rates of people aged 16-19 and people aged 2024 at 64.2% and 77.6% respectively. Scotland’s economic activity rates for those aged 1619 was considerably higher than the UK rate at 59.8%, with England and Wales having rates of 60.1% and 57.9% respectively.
•
Scotland had a lower economic activity rate for the ’50 – retirement age’ category of people and the ‘over retirement age’ category than England and the UK as a whole. Scotland’s economic activity rate for those aged ‘50-retirement age’ was 68.9%, which was 2.4% lower than the UK (71.3%) and 3.3% lower than England (72.2%)
Table 10: Economic Activity rates (as a % of age group) by Country: Local Area Labour Force Survey March 2003-February 2004. (Accessed via NOMIS on 15 February 2005)
All aged 16+ All of working age Aged 16-19 Aged 20-24 Aged 25-34 Aged 35-49 Aged 50+ Aged 50-retirement age Over retirement age
England Wales Scotland 62.9 57.8 62.1 78.5 74.2 78 60.1 57.9 64.2 76.2 75 77.6 83.2 80.9 83 84.9 82.6 84.7 38.3 33 35.9 72.2 63.9 68.9 9.5 7.6 8
United Kingdom 62.5 78 59.8 76.2 83 84.5 37.7 71.3 9.3
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Figure 11: Economic Inactivity Rates of all working age people over time: Scotland, England and Wales (1995-2004) (Labour Force Survey four quarter averages – seasonally unadjusted. Accessed via NOMIS on 15 February 2005)
27 26 25 24 23 22 21
Economic Inactivity Rate (% of working age people)
28
England Scotland Wales
Dec 2003-Nov 2004
Jun 2003-May 2004
Dec 2002-Nov 2003
Jun 2002-May 2003
Dec 2001-Nov 2002
Jun 2001-May 2002
Dec 2000-Nov 2001
Jun 2000-May 2001
Dec 1999-Nov 2000
Jun 1999-May 2000
Dec 1998-Nov 1999
Jun 1998-May 1999
Dec 1997-Nov 1998
Jun 1997-May 1998
Dec 1996-Nov 1997
Jun 1996-May 1997
Dec 1995-Nov 1996
Jun 1995-May 1996
Dec 1994-Nov 1995
Jun 1994-May 1995
20
Time Period
Figure 11 above shows that: •
In the Dec 2003- November 2004 quarter, Scotland experienced an economic inactivity rate of 20.6% of the working age population. This was lower than England at 21.2% and Wales at 24.4%.
•
Scotland has seen a decline in its economic inactivity rate of all working age people over the period, which peaked at 23.1% in December 1995 - November 1996. Since July 2002May 2003, Scotland has had the same or slightly lower economic inactivity rates as England. Over the entire period, Scotland has also had lower economic inactivity rates of the working age population than Wales.
•
England’s economic inactivity rate has remained fairly stable over the 1995 - 2004 period. There may however be more variability in the figures for Scotland and Wales as a result of the sample sizes used. It should be remembered that when considering this data that the Labour Force Survey data is less robust than the Local Area Labour Force Survey for regional data.
•
Table 9 ‘Key Labour Market Statistics’ (seasonally adjusted data) shows that in NovemberJanuary 2005, the economic inactivity rate of all working age people was 21.4% in Scotland. This was a 0.6% increase in the rate on the previous year. Of the 669,000 people considered economically inactive, 33% were described as wanting a job, with 67% not wanting a job. providing research and information services to the Scottish Parliament 19
Earnings Figure 12: Median Gross Weekly Earnings for Scotland and Local Authorities 2004 (Annual Survey of Hours and Earnings (ASHE) accessed via Scottish Executive Statistics webpage on 8 March 2005) Median Gross weekly earnings (£'s per week) 460.0 440.0
400.0 380.0 360.0 340.0 320.0
Scottish Borders, The
Moray
Inverclyde
Clackmannanshire
Dumfries & Galloway
Perth & Kinross
Angus
West Dunbartonshire
Fife
Western Isles
Highland
Argyll & Bute
North Ayrshire
North Lanarkshire
East Dunbartonshire
East Renfrewshire
Falkirk
West Lothian
Stirling
Aberdeenshire
East Lothian
East Ayrshire
Glasgow City
Midlothian
South Lanarkshire
Dundee City
Renfrewshire
South Ayrshire
Edinburgh, City of
Aberdeen City
Shetland Islands
300.0
Scotland
£'s per week
420.0
Local Authority
(N.B. The Annual Survey of Hours and Earnings replaced the New Earnings Survey in October 2004. The Scottish Executive has explained that in order to improve coverage and hence make the survey more representative, supplementary information was collected for the 2004 ASHE survey on businesses not registered for VAT and for people who changed or started new jobs between sample selection and the survey reference period. The 2004 ASHE results are therefore discontinuous with the results for 2003, for which no supplementary information was collected. The figure above uses the data that has been supplemented for 2004. Earnings data for the Orkney Isles is not available/not reliable. It should also be noted that the data for the following local authorities is not as reliable in terms of confidence limits, although it is still considered acceptable: Shetland Islands, Midlothian, East Renfrewshire, East Dunbartonshire, Western Isles, and Clackmannanshire.)
•
The median weekly gross earnings for Scotland in 2004 was £392.70 per week (pw)
•
The Shetland Islands had the highest level of median weekly gross earnings of £448.40pw, followed by Aberdeen City at £432.70pw
•
The City of Edinburgh had the 4th highest median weekly earnings at £423.50pw, with Dundee City ranked 6th at £408.10pw. Glasgow City was in 9th place at £403.60pw
•
The local authorities with the lowest median weekly gross earnings were the Scottish Borders at £326.30pw, Moray at £326.60pw; and Inverclyde at £347.50pw
•
The difference between the highest (Shetland Islands) and lowest (Scottish Borders) median weekly gross earnings was equal to £122.10 per week providing research and information services to the Scottish Parliament 20
Manufactured Exports The index of manufactured exports is published by the Scottish Executive quarterly and provides information on the change in the level of exports (in constant prices) for each quarter from 1995 Q1. The series was suspended following publication in October 2003 to allow time to integrate the quarterly series with the development of the annual Global Connections Survey which was published in February 2004.The publication of results for 2004 Q1 represented the first release of the series since this suspension. The quarterly series now presents exports in constant prices only (i.e. deflated to 2000 prices). Constant price estimates provide a more appropriate measure for monitoring change over time as they remove the effect of price changes and allow the change in the volume of exports to be measured. The series is now produced in index form rather than cash values. All export sales values have been deflated to 2001 prices in the latest quarters, so cash values are not particularly meaningful. The main purpose of the series is to identify change over time and therefore an index is more appropriate.
Figure 13: Scottish manufacturing exports index (2001=100, seasonally adjusted) (Source: Scottish Executive manufacturing exports series accessed February 2005) 140.0 130.0
manufacturing export index
120.0 110.0 100.0
Total Manufacturing
90.0
Engineering & Allied Industries
80.0 70.0
Food, Drink & Tobacco
60.0 50.0
2004 Q3
2004 Q1
2003 Q3
2003 Q1
2002 Q3
2002 Q1
2001 Q3
2001 Q1
2000 Q3
2000 Q1
1999 Q3
1999 Q1
1998 Q3
1998 Q1
1997 Q3
1997 Q1
1996 Q3
1996 Q1
1995 Q3
1995 Q1
40.0
Time period
•
Figure 13 indicates a considerable decline in seasonally adjusted total manufactured exports since the final quarter of 2000, although the rate of decline appears to be recovering slightly since the end of 2002. In 2000 Q4, the manufactured exports index stood at 113.9. By Q3 of providing research and information services to the Scottish Parliament 21
2003, this had fallen to 76.3, a reduction of 33% in 3 years. Over the last quarter to 2004 Q3, there was a decrease of 0.7%, and over the latest 4 quarters there has been a decrease in growth in total manufactured exports of 5.8% on the previous 4 quarters •
Over the last quarter to 2004 Q3, the only industries to experience growth of their exports were wood, pulp, paper etc (+2.2%); and food, drink and tobacco industries (+1.3%). All other manufacturing industries experienced negative growth of their exports
•
Over the last four quarters on the previous four quarters, the following industries experienced positive growth of their exports: wood, pulp, paper etc (+3.6%); food, drink and tobacco (+3.3%); textiles, fur and leather (+0.3); other manufacturing industries (+7.3%)
•
It can be clearly seen that this overall pattern in manufactured exports from 2000 to 2004 has been the result of a strikingly similar pattern in the exports of engineering and allied industries, a fall of 52.6% since the peak of 2000 Q4 to 2004 Q3
•
Food, drink and tobacco exports have been generally rising (although not steadily) from 2000 to 2004
For a further breakdown of manufactured exports, data is available online.
Global Connections Survey (Source: Scottish Executive) The Global Connections survey provides a new measurement of Scottish annual export data. It is a large survey of Scottish businesses and was first carried out in the summer of 2003. The data was collected for 2002, with all industry sectors covered (categorised using Standard Industrial Classification or SIC codes). The latest survey results are provisional releases for 2003, as well as revised figures for the 2002 survey. The companies were selected using stratified random sampling from the Inter Departmental Business Register. •
The values of exports in the survey are measured at current prices. The survey was circulated to a representative sample of 10,040 companies who had operations in Scotland with a response from 3,300 (including nil responses)
•
Table 11 shows the data available for 2002 (revised) and 2003 (provisional) on the value of Scottish manufactured exports by manufacturing industry group
•
It can be seen that the Global connections survey measures total annual manufacturing exports at £13.02bn provisionally in 2003, which is a 12.5% decrease on total manufacturing exports in 2002 (£14.88bn – revised). Engineering and allied industries accounted for 49% of this total whilst food, drink and tobacco industries accounted for 25% of the total manufactured exports in 2003
•
Engineering and allied industries experienced a large drop in the value of their total manufactured exports in 2003, from exports valued at £8.33bn in 2002 to exports of £6.37bn in 2003 – a reduction of 23.5%. Only food, drink and tobacco industries experienced an increase in the value of their exports in 2003, rising 8% since 2002. providing research and information services to the Scottish Parliament 22
•
Further information on the methodology and sampling techniques used for the Global Connections Survey are available on-line.
Figure 14: Manufacturing Exports – The results of Global Connections Surveys (2002 revised and 2003 provisional) (Source: Scottish Executive export statistics) £9.000 Annual Global Connnections Data (2002 revised -£bn)
£8.000
Value of exports (£Bill)
£7.000 £6.000 £5.000
Global Connections data (2003 provisional£bn)
£4.000 £3.000 £2.000 £1.000
Other Manufacturing
Industry group
Engineering & Allied Industries
Metals & Metal Products
Chemicals, Coke, Refined Petroleum Products & Nuclear Fuel
Wood, Pulp, Paper, Publishing & Printing
Textiles, Fur & Leather
Food, Drink & Tobacco
£0.000
Table 11: Manufacturing Exports – The results of Global Connections Surveys (2002 revised and 2003 provisional) (Source: Scottish Executive export statistics) Global Annual Global Connections data % change Connnections Data (2003 provisional- year on year (2002 revised -£bn) £bn) Food, Drink & Tobacco
£3.020
£3.25
8%
Textiles, Fur & Leather
£0.410
£0.385
-6.1%
Wood, Pulp, Paper, Publishing & Printing
£0.435
£0.435
0%
Chemicals, Coke, Refined Petroleum Products & Nuclear Fuel
£1.565
£1.53
-2%
Metals & Metal Products
£0.570
£0.550
-3.5%
Engineering & Allied Industries
£8.330
£6.370
-23.5%
Other Manufacturing
£0.55
£0.50
-9.1%
Total Manufacturing
£14.88
£13.02
-12.5%
providing research and information services to the Scottish Parliament 23
Figure 15: Export Destinations (Excludes the rest of the UK. Source: Scottish Executive Global Connections Survey - 2003 provisional)
European Union 55%
Africa 2% Australasia 1% Asia 9%
Middle East 4% Central/South America 3% North America 15%
•
Rest of Europe 11%
It can be seen from figure 15 above that in 2003, the main destination of Scottish exports was the European Union (55%), with 15% of exports going to North America and 11% to the rest of Europe. Scotland sold 9% of its exports to Asia in 2003
providing research and information services to the Scottish Parliament 24
Figure 16: EU Export Destinations (Source: Scottish Executive Global Connections Survey – 2003 Provisional) 2,000 1,800
Value of Exports (£Mill)
1,600 1,400 1,200
Total exports (£Mill)
1,000 800 600 400 200
Luxembourg
Portugal
Austria
Greece
Finland
Denmark
Sweden
Belgium
Italy
Spain
Netherlands
Eire
France
Germany
0
Country
•
Figure 16 above shows the spread of Scottish exports across the European Union. (It should be remembered however that the accession countries are not yet included in this data). In terms of the value of exports, Germany was the main destination for Scottish exports in 2003, with exports worth £1.94bn. This however was a 14.8% decrease in the value of exports to Germany from 2002 (£2.27bn)
•
France and Ireland were the next largest recipients of Scottish exports in 2003, valued at £1.25bn and £1.23bn respectively. The value of exports to France also fell from 2002 by 31.6% (£1.82bn in 2002). However, in 2002 Ireland was not in the top 3 European Union destinations of Scottish Exports. The value of Scottish exports to Ireland has increased by 53.8% from £0.8bn in 2002 to £1.23bn in 2003.
•
The Netherlands fell from third place in 2002 to 4th in 2003, with the value of Scottish exports to the Netherlands falling from £1.38bn in 2002 to £1.19bn in 2003, a decrease of 13.8%
providing research and information services to the Scottish Parliament 25
SOURCES Bank of England publications [Online]. Available at: http://www.bankofengland.co.uk/inflationreport/index.htm [Accessed 15 Dec 2004] Federation of Small Businesses (FSB). Index of success 2005. Available at http://www.fsb.org.uk/data/default.asp?id=24&loc=scotland Fraser of Allander Institute. Quarterly Economic Review p3-11 February 2005 HM Treasury. (2005) Forecasts for the UK Economy: Index 2004. Available at: http://www.hm-treasury.gov.uk/media/1AB/1A/forecast_feb2005.pdf NOMIS Official Labour Market Statistics. (2003) VAT registrations/de-registrations by industry 2002. Available at: http://www.nomisweb.co.uk [Accessed 10 Dec 2004] Office of National Statistics. (2004) Labour Market Statistics: Scotland. Available at: http://www.statistics.gov.uk/pdfdir/lmsscot0204.pdf [Accessed 15 Dec 2004] Royal Bank of Scotland. (2004). Scottish Retail Sales Monitor. Available at: http://www.royalbankscot.co.uk/Group_Information/RBS_and_the_Economy/Surveys/default.ht m [Accessed 15 Dec 2004] Scottish Council for Development and Industry (SCDI). (2004) Indicator. Winter 2004. Scottish Executive. (2004) Scottish Manufactured Exports Estimates. Available at: http://www.scotland.gov.uk/stats/bulletins/00289-00.asp [Accessed 15 Dec 2004] Scottish Executive. (2005) Quarterly GDP index. Available at: http://www.scotland.gov.uk/Topics/Statistics/18879/15394 [Accessed 22 March 2005] Scottish Executive. OECD GDP figures and Independent Scottish economic forecasts. Unpublished
providing research and information services to the Scottish Parliament 26
This briefing provides a snapshot of some of the latest economic indicators for Scotland. It provides data on GDP (including comparisons with OECD countries and a summary of independent Scottish forecasts), analysis of the Scottish labour market and the latest export figures.
Scottish Parliament Information Centre (SPICe) Briefings are compiled for the benefit of the Members of the Parliament and their personal staff. Authors are available to discuss the contents of these papers with MSPs and their staff who should contact Fiona Mullen/Simon Wakefield on extension 85087/85372 or email [email protected] or [email protected] Members of the public or external organisations may comment on this briefing by emailing us at [email protected]. However, researchers are unable to enter into personal discussion in relation to SPICe Briefing Papers. Every effort is made to ensure that the information contained in SPICe briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes.
www.scottish.parliament.uk 1
briefing 22 March 2005 05/17
Summary of Key Indicators Indicator
Trend
Further data
Total GDP
Rising
Figure 1 and Tables 1 and 2
(Over the year to 2004 Q3 Scottish GDP rose by 1.8 per cent and by 0.9 per cent in the third quarter of 2004 (seasonally adjusted).) Manufacturing GDP
Fluctuating
Table 2
(a 1.1% decline over the latest quarter to Q3 2004, though against a backdrop of 0.4% growth over the most recent full year) Scottish growth forecasts
Continued growth
Tables 3 and 4
(ranging from 1.9% to 3.0% for 2004, but below the projected UK growth rate for 2005 and 2006) Employment
Rising slowly (slight year on year increase in total employment around the 2.4 million mark. Increases in banking /financial services and public administration etc. Decline in manufacturing employment.
Unemployment
Falling slowly (marginal annual fall in claimant count and ILO unemployment to Feb 05)
Exports
Decline in manufactured exports
Figures 5, 6, 10 and 11 Tables 7, 9 and 10
Figures 7, 8 and 9 Tables 8 and 9 Figures 13, 14, 15 and 16
(reduction of 33% in manufactured exports over last three years. Table 11 Decrease of 6% in year to 2004 Q3)
providing research and information services to the Scottish Parliament 2
Output Figure 1: Gross Value Added in Scotland and UK (Chained volume measures at basic prices, 1998 = 100, source: Scottish Executive 2005) 120.0
UK 115.0
Scotland 110.0
105.0
100.0
95.0
90.0
1998
1999
2000
2001
2002
2003
2004
Figure 1 above illustrates part of the story of Scottish economic growth (in terms of the Gross Value Added measure). The Scottish economy has grown steadily, but at a slower rate than that for the UK as a whole. From the first quarter of 1998 to Quarter 3 2004, the Scottish economy grew by 12.5%, compared to growth of 18.2% for the UK economy. Over the year to 2004 Q3, Scottish GDP rose by 1.8 per cent and by 0.9 per cent in the third quarter of 2004 (seasonally adjusted). The UK figures show that GDP rose by 3.2 per cent over the year to 2004 Q3 and by 0.5 per cent over the latest quarter.
Sources of Scottish and UK GDP growth Table 1: Average quarterly GDP growth rates (percentages) (Source: Fraser of Allander 2005) 1998 Q1 to 2000 Q3
2000 Q4 to 2004 Q3
1998 Q1 to 2004 Q3
Scotland
0.48
0.44
0.46
UK
0.82
0.54
0.64
providing research and information services to the Scottish Parliament 3
Analysis by Professor Brian Ashcroft (Fraser of Allander 2005) of the Scottish and UK GDP data over this period points to some of the underlying causes of differential Scottish and UK growth rates. Two distinct phases of growth are identified, from 1998 to 2000, and from 2000 to present, representing the periods before and after the peak of the electronics sector in Scotland. Table 1 above indicates the Scottish and UK growth rates in these two periods. The analysis indicates that Scottish GDP growth was about 70% of the UK level over the period, and that business services/ real estate was the single most significant source of growth for both Scotland and the UK (see also figure 2 below highlighting the 2000 to 2004 period). Figure 2: Absolute sectoral contributions to Scottish and UK growth 2000 (Q4) to 2004 (Q3); weighted quarterly average (Fraser of Allander 2005) -0.2 -0.15 -0.1 -0.05
0
0.05
0.1
Public sector
0.15
0.25
0.21
Manufacturing -0.16
0.3
0.15
0.09
Business services and real estate
0.26
-0.03 0.06
Retail and wholesale Transport
0.05 0.02
Construction Other services
0.03
Finance
0.03
0.02 0.03
Hotels and catering Agriculture
0.12 0.09
0.06 0.07 0.07
Scotland
-0.02 -0.03
Utilities and mining
FS adjustment
0.2
0
UK
0.01
-0.09 -0.07
Figure 2 above indicates that in the 2000 to 2004 period the ‘public sector’ was substantially more significant to Scottish growth than for the UK, whilst conversely retail/wholesale contributed more to UK growth than Scottish. However, perhaps the clearest ‘story’ from the graphic above is the impact of the manufacturing (and in particular the electronics) recession on overall Scottish growth. The decline of the manufacturing sector led to an average quarterly reduction in growth of 0.16 percentage points.
providing research and information services to the Scottish Parliament 4
Table 2: Manufacturing Gross Value Added (Source: Scottish Executive 2005) Scotland 1998 to 2004 Q3 2001 = 100 Manufacturing Industries
Manufacturing
SIC 2003
D
2001 weights3
Refined Chemicals & Metals & Engineering Food, Drink Textiles, Total Other Petroleum Man-made Metal and Allied & Tobacco Footwear, ManuProducts & Fibres Products Industries Industries Leather & facturing Nuclear Fuel Clothing DD,DE,DH, DF DG DJ DK,DL,DM DA DB,DC DI,DN
175
2
15
16
63
33
8
39
101.8 103.8 104.8 100.0 91.6 90.4 91.1 90.9 89.9
103.9 108.6 103.6 100.0 110.2 117.3 123.0 128.3 127.9
89.3 92.9 88.0 100.0 101.3 93.8 89.4 88.6 87.0
115.6 106.7 100.9 100.0 95.4 93.1 90.0 94.1 96.5
100.0 108.9 116.0 100.0 82.9 81.6 83.7 82.7 80.5
99.1 97.7 95.7 100.0 98.6 100.8 103.8 103.2 102.7
132.1 119.2 113.0 100.0 86.8 82.1 81.2 80.0 77.0
103.6 102.7 103.5 100.0 94.7 93.9 93.9 93.6 93.4
Percentage change, latest quarter on previous quarter -1.1 -0.3 -1.8 Percentage change, latest 4 quarters on previous 4 quarters
2.6
-2.7
-0.4
-3.8
-0.2
0.4
-0.6
1.7
3.4
-4.7
-0.8
1998 1999 2000 2001 2002 2003 2004
Q1 Q2 Q3
8.2
-6.1
1. Gross Value Added (GVA) is also referred to as Gross Domestic Product (GDP) at basic prices 2. Estimates cannot be regarded as accurate to the last digit shown
Data available online. A more detailed analysis of the GVA figures for Scottish manufacturing is provided in Table 2 above. The rise and fall of the ‘engineering and allied industries’ (including electronics) is clearly shown. Only textiles/footwear/clothing has fallen by a greater proportion since 2000, and as the ‘2001 weights’ indicate this was a much smaller sector. Indeed, the figures above disguise the collapse of the electrical and instrument engineering sector, which peaked at an index point of 126.0 in 2000 (Q3) before declining to its current index point of 73.6, more than a 40% decline in GVA over four years.
providing research and information services to the Scottish Parliament 5
Economic growth in OECD countries Figure 3: Growth in Gross Domestic Product (volumes) on 4 quarters to 2004 Q3 compared with previous four quarters (Figures collated by Scottish Executive)
Ireland South Korea United States New Zealand Greece Australia Czech Republic Mexico Major Seven (G7) UK (Market) Sweden Japan Spain Finland Belgium Norway Canada France Denmark EU15 Eurozone Italy Germany Netherlands Portugal UK (Basic) Scotland (Basic)
5.4% 4.9% 4.6% 4.3% 4.0% 4.0% 3.8% 3.5% 3.3% 3.0% 3.0% 2.9% 2.7% 2.6% 2.5% 2.4% 2.3% 2.0% 1.9% 1.9% 1.6% 0.9% 0.9% 0.8% 0.7% 3.2% 1.8%
Figure 3 above provides an international context for Scottish growth rates. The OECD country GDP figures above are calculated on the basis of ‘market prices’. Scottish data is not, however, available at market prices. The Scottish figures are provided at ‘basic prices’ meaning that direct like-for-like comparisons with other OECD countries are not possible. Basic prices calculations exclude taxes less subsidies on products (taxes on products include VAT and excise duties). For comparative purposes UK GDP growth at market prices was 3.0%, and at basic prices was 3.2%. Despite the limitations of the data, the above analysis does point towards the latest year’s Scottish GDP growth being not far from the European average, sitting above that of countries such as the Netherlands and Portugal, but well below countries such as Ireland, New Zealand and Greece.
providing research and information services to the Scottish Parliament 6
Economic Forecasts Table 3: Independent forecasts of GDP growth 2004 - 2006: Scotland and UK (1) (2) Forecasts collated by Scottish Executive and provided to SPICe 2004
2005
2006
Scotland UK Scotland UK Scotland UK Fraser of Allander Institute (February 2005)
2.0
3.1
1.7
2.6
1.5
2.5
ITEM Club (Dec 2004)
2.3
3.2
1.8
2.8
1.8
2.5
Experian Business Strategies (November 2004)
1.9
3.1
2.4
2.8
2.6
2.8
Cambridge Econometrics (August 2004)
3.0
3.1
2.7
3.1
2.1
2.5
Note: 1. FAI and ITEM Club produces forecasts for GDP, whereas CE and EBS produce forecasts of GVA. Note: 2. Source for FAI’s UK forecast: National Statistics, National Institute Economic Review, 191, January 2005 and "Forecasts for the UK economy", HM Treasury, November 2004 and January 2005.
The four independent forecasters above all estimated that GDP growth in the Scottish economy exceeded its ‘long run average annual growth rate of 1.7%’ in 2004. (This compares with a long run average growth rate of 2.2 per cent for the UK). With the exception of the Experian forecast growth is expected to slow in 2005 and 2006. In all cases Scottish GDP is expected to continue to grow more slowly than the UK. Table 4: Forecasts for the UK economy HM Treasury February 2005, Forecasts for the UK Economy a comparison of independent forecasts, http://www.hmtreasury.gov.uk/media/1AB/1A/forecast_feb2005.pdf
Independent forecasting institutions continue to project steady growth for the UK economy over the medium term to 2009. Inflation is expected to remain low and claimant unemployment to reduce slightly.
providing research and information services to the Scottish Parliament 7
Federation of Small Businesses (FSB) “Index of success 2005” Figure 4: the FSB Index of Success (Federation of Small Businesses 2005)
Some recent comment and debate has considered the value of using the ‘traditional’ indicator of GDP or economic growth as the prime measure of success of a nation. Partly in response to this concern, the Federation of Small Businesses recently developed a “composite indicator that would allow us to better judge Scotland’s success or failure as a nation, based on wealth, equality, health and future potential compared to 23 other OECD nations”. The summary chart is reproduced above in figure 4. Scotland lies towards the bottom end of the ‘success table’, at 17th out of 24. Behind the composite figures Scotland performs better on employment and student literacy, slightly below average in terms of GDP per capita and very poorly in terms of life expectancy.
providing research and information services to the Scottish Parliament 8
Employment Figure 5: Employee job estimates by industry (seasonally unadjusted) (Source: Office for National Statistics, accessed via NOMIS February 2005)
Number employed
700000
600000
Public Admin, Education and Health
500000
Distribution, hotels and restaurants
400000
Banking, finance and Insurance
300000
Manufacturing
200000
Construction
100000
Agriculture and Fishing Jun-04
Dec-03
Jun-03
Dec-02
Jun-02
Dec-01
Jun-01
Dec-00
Jun-00
Dec-99
Jun-99
Dec-98
Jun-98
Dec-97
Jun-97
Dec-96
Jun-96
Dec-95
0
Time period
•
•
•
•
Over the 2 year period Sep 2002 - Sep 2004, the financial services sector experienced an increase in employment of 8.4% from 379,057 employees in 2002 to 410,933 employees in 2004 Manufacturing employment has continued to decline over the entire period. As at September 2004, there were an estimated 237,000 manufacturing employees in Scotland. This is an 12.1% decrease since the same period in 2002 (270,000) Distribution, hotels and restaurants also saw virtually no change in the estimates of employment year on year (-0.8%) from September 2003 to 522,000 employees in September 2004. However, there was a seasonal increase (+3%) in estimates of employment from 527,000 in September 2003 to 542,000 in December 2003. This fell back by March 2004 to 522,000, rising again in June 2004 to 527,000. The sectors that saw an estimated annual increase were public administration, education and health; banking, finance and insurance; and construction. From September 2003 to September 2004, public administration, education and health experienced an increase in the number employed from 609,000 to 624,000 (an increase of 2.5%). Construction saw an estimated increase in the number employed from 143,000 to 147,000 (an increase of 2.7%). Banking, finance and insurance saw an estimated increase in the number employed from 395,000 to 411,000 (an increase of 4.1%)
Labour Market data available online. providing research and information services to the Scottish Parliament 9
Employment by Industry Figure 6: Composition of the Scottish workforce – September 2004, unadjusted (Source: Office for National Statistics, accessed via NOMIS February 2005) Public administration, education & health 29% Other services 6% Banking, finance and insurance, etc
Agriculture and fishing 1%
18% Energy and water 2% Manufacturing 10%
Construction 6%
Transport and communications 5%
Distribution, hotels and restaurants 23%
Figure 6 shows the proportions of estimated employment attributed to each industry. It can be seen that nearly a third of all employment is estimated to be in public administration, education and health (29%). This is up 2% of the total proportion since June 2004. The other two main providers of employment are distribution, hotels and restaurants (23% - down 1% since June 2004) and banking, finance and insurance etc (18% - up 1% since June 2004), followed by manufacturing (10% - down 1% since June 2004). (N.B.. It should be noted that the % changes over the three month period may be attributable to the data being seasonally unadjusted)
Over three quarters of Scottish employment is accounted for by service sector industries. Further analysis of the type of employment across these sectors is provided in Table 7 below • •
•
Three industries include a significant proportion of part time jobs - public administration (38%), distribution (48%) and finance (24%) In each of these three sectors, a large proportion of all employees are female, with women accounting for 73% of employment in public administration etc, 54% of employment in distribution etc and 49% of employment in finance etc However, with the exception of public administration, in every industry males have significantly higher proportions of full time employment than females. For example, even though females account for 54% of total employment in distribution etc, 32% of providing research and information services to the Scottish Parliament 10
employment in this industry is full time males in comparison to 20% of employment being full time females. Table 7: Industry Employment Categorised by Full Time/Part Time and Male/Female Workers (September 2004) (Source: Office for National Statistics, accessed via NOMIS February 2005) Public admin, education and health
Distribution hotels & restaurants
Banking, finance & Insurance, etc
Manufacturing
TOTAL
624031
521947
410933
FT- NUMBER
384925
272248
PT- NUMBER
239106
FT - % of total PT - % of total
Sep 2004 (latest figures)
Construction
Transport and comms
Agriculture and Fishing
237475
146492
121706
31685
311459
219453
139417
105127
25133
249699
99474
18022
7075
16579
6552
61.68
52.16
75.79
92.41
95.17
86.38
79.32
38.32
47.84
24.21
7.59
4.83
13.62
20.68
Male FT
144270
166625
185304
168436
123733
85266
21005
Male PT
24754
70878
23650
4401
1805
8077
3313
Female FT
240655
105623
126155
51017
15684
19861
4128
214352
178821
75824
13621
5270
8502
3239
23.12
31.92
45.09
70.93
84.46
70.06
66.29
3.97
13.58
5.76
1.85
1.23
6.64
10.46
38.56
20.24
30.70
21.48
10.71
16.32
13.03
34.35
34.26
18.45
5.74
3.60
6.99
10.22
Female PT Male FT- % total Male PT- % total Female FT- % total Female PT- % total
of of of of
providing research and information services to the Scottish Parliament 11
Unemployment Figure 7: Unemployment by Local Authority Area (Annual Scottish Labour Force Survey 2003/04, Scottish Executive/Office of National Statistics)
Unemployment rate (% of economically active)
10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0%
West Lothian
Eilean Siar (Western Isles)
Stirling
South Ayrshire
South Lanarkshire
Renfrewshire
Perth and Kinross
North Lanarkshire
Moray
North Ayrshire
Midlothian
Inverclyde
Highland
Fife
Glasgow City
Falkirk
Edinburgh, City of
East Lothian
East Renfrewshire
East Dumbartonshire
Dundee City
East Ayrshire
West Dumbartonshire
Dumfries and Galloway
Clackmannanshire
Argyll & Bute
Scottish Borders, The
Angus
Aberdeenshire
Aberdeen City
Scotland
0.0%
Local Authority Area
•
•
• • • •
Based on the International Labour Organisation (ILO) definition, according to the Annual Scottish Labour Force Survey, there were 145,000 people aged 16 or over unemployed in 2003/04 (5.8% of the economically active population) In terms of Local Authority Areas, Perth and Kinross had the lowest unemployment rate (2.4%), with North Ayrshire and North Lanarkshire being the highest at 9.2% and 9.5% respectively In terms of the major cities, Aberdeen (3.6%) and Edinburgh (5.5%) experienced much lower rates than Glasgow (8%) and Dundee (8.2%) Data was unavailable for the Orkney Islands and the Shetland Islands Table 8 below shows the actual number of unemployed by Local Authority Area Table 9 below indicates in November-January 2005, the employment rate was 74.1% (an decrease of 1.1% since the previous data release in September - November 2004). Some 78.6% of the working age population in November-January 2005 is described as being “economically active” (in employment or unemployed, a decrease of 1.1% since the previous data). Of the 669,000 economically inactive, some 450,000 are described as not wanting a job, with 220,000 wanting a job providing research and information services to the Scottish Parliament 12
Table 8: Unemployment by Local Authority Area (Annual Scottish Labour Force Survey 2003/04, Scottish Executive/Office of National Statistics)
Local Authority Area Proportion Level Scotland 5.8% 145,000 Aberdeen City 3.6% 4,000 Aberdeenshire 4.4% 5,000 Angus 5.7% 3,000 Argyll & Bute 5.4% 2,000 Scottish Borders, The 3.1% 2,000 Clackmannanshire 6.4% 1,000 West Dumbartonshire 8.1% 4,000 Dumfries and Galloway 4.7% 3,000 Dundee City 8.2% 5,000 East Ayrshire 7.2% 4,000 East Dumbartonshire 3.3% 2,000 East Lothian 4.4% 2,000 East Renfrewshire 4.4% 2,000 Edinburgh, City of 5.5% 13,000 Falkirk 3.9% 3,000 Fife 5.1% 9,000 Glasgow City 8.0% 21,000 Highland 4.4% 5,000 Inverclyde 7.7% 3,000 Midlothian 4.6% 2,000 Moray 5.6% 2,000 North Ayrshire 9.2% 6,000 North Lanarkshire 9.5% 14,000 Orkney Islands * * Perth and Kinross 2.4% 2,000 Renfrewshire 4.9% 4,000 Shetland Islands * * South Ayrshire 6.0% 3,000 South Lanarkshire 6.1% 9,000 Stirling 5.8% 3,000 West Lothian 4.7% 4,000 Eilean Siar (Western Isles) 4.3% 1,000
providing research and information services to the Scottish Parliament 13
Table 9: Key Labour Market Statistics (Source: Office for National Statistics, Labour Market Statistics March 2005, Scotland, seasonally adjusted unless otherwise stated)
Rate (%) 74.1
Change on year (level) 3
Change on year (rate) -0.4
Employment
Nov 04 - Jan 05
Level (Thousands) 2,394
Unemployment
Nov 04 - Jan 05
145
5.7
-4
-0.2
Economically Active
Nov 04 - Jan 05
2,539
78.6
-1
-0.6
Economically Inactive:
Nov 04 - Jan 05
669
21.4
19
0.6
Of which, not wanting a job
Nov 04 - Jan 05
450
35
Of which wanting a job Civilian workforce jobs (unadjusted) Claimant count (seasonally adjusted)
Nov 04 - Jan 05
220
-17
Sep 03
2,522
7
Feb 05
96.1
Date
3.6
-3.6
-0.1
Data available online. Figure 8: Unemployment Rates: UK Comparisons (Labour Force Survey Quarterly data Unemployment rate (%) of working age people - Seasonally unadjusted – NOMIS) N.B. LFS quarterly data is not as robust for regional data. Where possible, the Annual Scottish Labour Force Survey data should be used for Scottish figures. The labour force survey (LFS) is a quarterly sample survey carried out by interviewing people about their circumstances and work. it is the biggest regular household survey in this country and provides a rich and vital source of information about labour force using internationally agreed concepts and definitions. The quarterly LFS dataset on Nomis is not seasonally adjusted. 10
8
7
6
Unemployment rate (%)
9
England
Scotland
Wales 5
Dec 2003-Nov 2004
Jun 2003-May 2004
Dec 2002-Nov 2003
Jun 2002-May 2003
Dec 2001-Nov 2002
Jun 2001-May 2002
Dec 2000-Nov 2001
Jun 2000-May 2001
Dec 1999-Nov 2000
Jun 1999-May 2000
Dec 1998-Nov 1999
Jun 1998-May 1999
Dec 1997-Nov 1998
Jun 1997-May 1998
Dec 1996-Nov 1997
Jun 1996-May 1997
Dec 1995-Nov 1996
Jun 1995-May 1996
Dec 1994-Nov 1995
Jun 1994-May 1995
4
Time Period
providing research and information services to the Scottish Parliament 14
•
The latest Labour Force Survey quarterly data (seasonally unadjusted) shows that the unemployment rate as a percentage of all working age people was 5.8 % in Scotland in the period December 2003 – November 2004.
•
Since the period Dec 2002 – November 2003, the quarterly unemployment rate for Scotland has remained stable, fluctuating only between 5.8% and 5.9%. Before this period, there had been a continual decline in Scotland’s unemployment rate from 6.8% in June 2001 May 2002 to 5.9% December 2002 - November 2003
•
Scotland’s latest unemployment rate of working age people, at 5.8%, is higher than both England and Wales which both have rates of 4.7% during the same period.
•
The unemployment rates (as a percentage of working age people) have been following a declining trend for all 3 regions of the UK, over the period 1995 – 2004
•
There appears, however, to be more variability in the unemployment rates over the time period for both Scotland and Wales. This could be due to the smaller sample sizes involved.
•
It could also be noted that over almost the entire period, England has had consistently lower unemployment rates than Scotland and Wales. From the period June 2000-May 2001, Wales has also experienced continuously lower unemployment rates than Scotland.
Figure 9: Claimant Count Unemployment in Scotland (1983 – 2004): Office of National Statistics, seasonally adjusted. Data for each year taken for the month of December Claimant Count 400000
300000
250000
200000
150000
100000
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
50000 1983
Number of people unemployed
350000
Year (month = Dec)
•
In December 2004, claimant count unemployment stood at 86,043 people in Scotland providing research and information services to the Scottish Parliament 15
•
The Claimant Count unemployment level has been in continuous decline since 1992, where in December of that year the number of people claiming unemployment related benefits was 251,774. So there has been a 65.8% decrease in the level of claimants since 1992. See the box below which explains the claimant count unemployment measurement, and its limitations
UNEMPLOYMENT MEASUREMENTS (Source: Office of National Statistics 2002) Official estimates of unemployment are produced by ONS and are based upon the ILO (International Labour Organization) definition. The claimant count measures how many unemployed people are claiming unemployment-related benefits. There is a difference between the two series, and although they move broadly in line often one measure increases while the other falls. The reason for this is the difference in what they measure. Unemployment is a count of jobless people who want to work, are available to work, and are actively seeking employment. The ILO definition is used internationally, so comparisons between countries can be made, and it also allows for consistent comparisons over time. Unemployment is calculated using data from the Labour Force Survey (LFS), so it is subject to sampling differences. The claimant count measures only those people who are claiming unemployment-related benefits (Jobseeker's Allowance). It is always the lower measure because some unemployed people are not entitled to claim benefits, or choose not to do so. Benefits rules vary over time and between different countries, so it is more difficult to make comparisons. The claimant count comes from the administrative records of Jobcentre Plus (formerly Employment Service), and is available earlier than the LFS-based unemployment data. The difference between the two measures is wider for women than for men. Currently fewer than half of unemployed women claim unemployment-related benefits compared with around three quarters of men. Unemployment data are available in their current format back to 1984 (non-seasonally adjusted and seasonally adjusted). The present seasonally adjusted claimant count series goes back to 1971, and is adjusted to allow for significant changes to benefit rules.
providing research and information services to the Scottish Parliament 16
Economic (In)Activity Figure 10: Economic Activity rates: Scotland and the UK (Local Area Labour Force Survey March 2003 – Feb 2004. Accessed via NOMIS on 15 February 2005) 90 80
Economic Activity Rate (%)
70 60
Scotland
50 40
United Kingdom
30 20 10 0 All aged 16+
All of working age
Aged 16-19 Aged 20-24 Aged 25-34 Aged 35-49 Aged 50+
Aged 50Over retirement retirement age age
Age group
The Local Area Labour Force Survey (LALFS) is the preferred source of data for sub-regions for the following reasons: The LALFS estimates are based on a larger sample, which includes the LFS boost surveys, so gives estimates that are more reliable. The quarterly dataset sample does not include the boost surveys, so its estimates are less reliable. The LALFS contains a much wider range of variables. However, the disadvantage of the LALFS is that its results are not as timely as the quarterly dataset. Where timeliness is very important, the new quarterly LFS dataset can be used to provide more up-to-date estimates, but remember that these will be less reliable. Only use the old unreweighted quarterly LFS dataset when data prior to 2000 are required. Although this dataset contains data from 1992 to autumn 2003, the post-2000 data should only be used if comparison with earlier years is essential. In particular, note that LFS data from this dataset will be inconsistent with all other LFS outputs released by ONS (via Nomis and all other dissemination routes).
Figure 10 indicates that Scotland has lower rates of economic activity than the UK as a whole in the 50+ years categories. However, in all other age groups, Scotland has the same, if not higher rates of economic activity than the UK. Table 10 below shows that: •
Scotland’s economic activity rate of all working age people was 78% in March 2003 – February 2004. This was the same rate as the UK as a whole, but was lower than providing research and information services to the Scottish Parliament 17
England’s activity rate at 78.5%. Wales however had a lower rate at 74.2% of the working age population. •
When all people aged 16+ were taken into account, Scotland had a slightly lower economic activity rate (62.1%) than the UK as a whole (62.5%). England had the highest economic activity rate of all people aged 16+ at 62.9%
•
Scotland had the highest economic activity rates of people aged 16-19 and people aged 2024 at 64.2% and 77.6% respectively. Scotland’s economic activity rates for those aged 1619 was considerably higher than the UK rate at 59.8%, with England and Wales having rates of 60.1% and 57.9% respectively.
•
Scotland had a lower economic activity rate for the ’50 – retirement age’ category of people and the ‘over retirement age’ category than England and the UK as a whole. Scotland’s economic activity rate for those aged ‘50-retirement age’ was 68.9%, which was 2.4% lower than the UK (71.3%) and 3.3% lower than England (72.2%)
Table 10: Economic Activity rates (as a % of age group) by Country: Local Area Labour Force Survey March 2003-February 2004. (Accessed via NOMIS on 15 February 2005)
All aged 16+ All of working age Aged 16-19 Aged 20-24 Aged 25-34 Aged 35-49 Aged 50+ Aged 50-retirement age Over retirement age
England Wales Scotland 62.9 57.8 62.1 78.5 74.2 78 60.1 57.9 64.2 76.2 75 77.6 83.2 80.9 83 84.9 82.6 84.7 38.3 33 35.9 72.2 63.9 68.9 9.5 7.6 8
United Kingdom 62.5 78 59.8 76.2 83 84.5 37.7 71.3 9.3
providing research and information services to the Scottish Parliament 18
Figure 11: Economic Inactivity Rates of all working age people over time: Scotland, England and Wales (1995-2004) (Labour Force Survey four quarter averages – seasonally unadjusted. Accessed via NOMIS on 15 February 2005)
27 26 25 24 23 22 21
Economic Inactivity Rate (% of working age people)
28
England Scotland Wales
Dec 2003-Nov 2004
Jun 2003-May 2004
Dec 2002-Nov 2003
Jun 2002-May 2003
Dec 2001-Nov 2002
Jun 2001-May 2002
Dec 2000-Nov 2001
Jun 2000-May 2001
Dec 1999-Nov 2000
Jun 1999-May 2000
Dec 1998-Nov 1999
Jun 1998-May 1999
Dec 1997-Nov 1998
Jun 1997-May 1998
Dec 1996-Nov 1997
Jun 1996-May 1997
Dec 1995-Nov 1996
Jun 1995-May 1996
Dec 1994-Nov 1995
Jun 1994-May 1995
20
Time Period
Figure 11 above shows that: •
In the Dec 2003- November 2004 quarter, Scotland experienced an economic inactivity rate of 20.6% of the working age population. This was lower than England at 21.2% and Wales at 24.4%.
•
Scotland has seen a decline in its economic inactivity rate of all working age people over the period, which peaked at 23.1% in December 1995 - November 1996. Since July 2002May 2003, Scotland has had the same or slightly lower economic inactivity rates as England. Over the entire period, Scotland has also had lower economic inactivity rates of the working age population than Wales.
•
England’s economic inactivity rate has remained fairly stable over the 1995 - 2004 period. There may however be more variability in the figures for Scotland and Wales as a result of the sample sizes used. It should be remembered that when considering this data that the Labour Force Survey data is less robust than the Local Area Labour Force Survey for regional data.
•
Table 9 ‘Key Labour Market Statistics’ (seasonally adjusted data) shows that in NovemberJanuary 2005, the economic inactivity rate of all working age people was 21.4% in Scotland. This was a 0.6% increase in the rate on the previous year. Of the 669,000 people considered economically inactive, 33% were described as wanting a job, with 67% not wanting a job. providing research and information services to the Scottish Parliament 19
Earnings Figure 12: Median Gross Weekly Earnings for Scotland and Local Authorities 2004 (Annual Survey of Hours and Earnings (ASHE) accessed via Scottish Executive Statistics webpage on 8 March 2005) Median Gross weekly earnings (£'s per week) 460.0 440.0
400.0 380.0 360.0 340.0 320.0
Scottish Borders, The
Moray
Inverclyde
Clackmannanshire
Dumfries & Galloway
Perth & Kinross
Angus
West Dunbartonshire
Fife
Western Isles
Highland
Argyll & Bute
North Ayrshire
North Lanarkshire
East Dunbartonshire
East Renfrewshire
Falkirk
West Lothian
Stirling
Aberdeenshire
East Lothian
East Ayrshire
Glasgow City
Midlothian
South Lanarkshire
Dundee City
Renfrewshire
South Ayrshire
Edinburgh, City of
Aberdeen City
Shetland Islands
300.0
Scotland
£'s per week
420.0
Local Authority
(N.B. The Annual Survey of Hours and Earnings replaced the New Earnings Survey in October 2004. The Scottish Executive has explained that in order to improve coverage and hence make the survey more representative, supplementary information was collected for the 2004 ASHE survey on businesses not registered for VAT and for people who changed or started new jobs between sample selection and the survey reference period. The 2004 ASHE results are therefore discontinuous with the results for 2003, for which no supplementary information was collected. The figure above uses the data that has been supplemented for 2004. Earnings data for the Orkney Isles is not available/not reliable. It should also be noted that the data for the following local authorities is not as reliable in terms of confidence limits, although it is still considered acceptable: Shetland Islands, Midlothian, East Renfrewshire, East Dunbartonshire, Western Isles, and Clackmannanshire.)
•
The median weekly gross earnings for Scotland in 2004 was £392.70 per week (pw)
•
The Shetland Islands had the highest level of median weekly gross earnings of £448.40pw, followed by Aberdeen City at £432.70pw
•
The City of Edinburgh had the 4th highest median weekly earnings at £423.50pw, with Dundee City ranked 6th at £408.10pw. Glasgow City was in 9th place at £403.60pw
•
The local authorities with the lowest median weekly gross earnings were the Scottish Borders at £326.30pw, Moray at £326.60pw; and Inverclyde at £347.50pw
•
The difference between the highest (Shetland Islands) and lowest (Scottish Borders) median weekly gross earnings was equal to £122.10 per week providing research and information services to the Scottish Parliament 20
Manufactured Exports The index of manufactured exports is published by the Scottish Executive quarterly and provides information on the change in the level of exports (in constant prices) for each quarter from 1995 Q1. The series was suspended following publication in October 2003 to allow time to integrate the quarterly series with the development of the annual Global Connections Survey which was published in February 2004.The publication of results for 2004 Q1 represented the first release of the series since this suspension. The quarterly series now presents exports in constant prices only (i.e. deflated to 2000 prices). Constant price estimates provide a more appropriate measure for monitoring change over time as they remove the effect of price changes and allow the change in the volume of exports to be measured. The series is now produced in index form rather than cash values. All export sales values have been deflated to 2001 prices in the latest quarters, so cash values are not particularly meaningful. The main purpose of the series is to identify change over time and therefore an index is more appropriate.
Figure 13: Scottish manufacturing exports index (2001=100, seasonally adjusted) (Source: Scottish Executive manufacturing exports series accessed February 2005) 140.0 130.0
manufacturing export index
120.0 110.0 100.0
Total Manufacturing
90.0
Engineering & Allied Industries
80.0 70.0
Food, Drink & Tobacco
60.0 50.0
2004 Q3
2004 Q1
2003 Q3
2003 Q1
2002 Q3
2002 Q1
2001 Q3
2001 Q1
2000 Q3
2000 Q1
1999 Q3
1999 Q1
1998 Q3
1998 Q1
1997 Q3
1997 Q1
1996 Q3
1996 Q1
1995 Q3
1995 Q1
40.0
Time period
•
Figure 13 indicates a considerable decline in seasonally adjusted total manufactured exports since the final quarter of 2000, although the rate of decline appears to be recovering slightly since the end of 2002. In 2000 Q4, the manufactured exports index stood at 113.9. By Q3 of providing research and information services to the Scottish Parliament 21
2003, this had fallen to 76.3, a reduction of 33% in 3 years. Over the last quarter to 2004 Q3, there was a decrease of 0.7%, and over the latest 4 quarters there has been a decrease in growth in total manufactured exports of 5.8% on the previous 4 quarters •
Over the last quarter to 2004 Q3, the only industries to experience growth of their exports were wood, pulp, paper etc (+2.2%); and food, drink and tobacco industries (+1.3%). All other manufacturing industries experienced negative growth of their exports
•
Over the last four quarters on the previous four quarters, the following industries experienced positive growth of their exports: wood, pulp, paper etc (+3.6%); food, drink and tobacco (+3.3%); textiles, fur and leather (+0.3); other manufacturing industries (+7.3%)
•
It can be clearly seen that this overall pattern in manufactured exports from 2000 to 2004 has been the result of a strikingly similar pattern in the exports of engineering and allied industries, a fall of 52.6% since the peak of 2000 Q4 to 2004 Q3
•
Food, drink and tobacco exports have been generally rising (although not steadily) from 2000 to 2004
For a further breakdown of manufactured exports, data is available online.
Global Connections Survey (Source: Scottish Executive) The Global Connections survey provides a new measurement of Scottish annual export data. It is a large survey of Scottish businesses and was first carried out in the summer of 2003. The data was collected for 2002, with all industry sectors covered (categorised using Standard Industrial Classification or SIC codes). The latest survey results are provisional releases for 2003, as well as revised figures for the 2002 survey. The companies were selected using stratified random sampling from the Inter Departmental Business Register. •
The values of exports in the survey are measured at current prices. The survey was circulated to a representative sample of 10,040 companies who had operations in Scotland with a response from 3,300 (including nil responses)
•
Table 11 shows the data available for 2002 (revised) and 2003 (provisional) on the value of Scottish manufactured exports by manufacturing industry group
•
It can be seen that the Global connections survey measures total annual manufacturing exports at £13.02bn provisionally in 2003, which is a 12.5% decrease on total manufacturing exports in 2002 (£14.88bn – revised). Engineering and allied industries accounted for 49% of this total whilst food, drink and tobacco industries accounted for 25% of the total manufactured exports in 2003
•
Engineering and allied industries experienced a large drop in the value of their total manufactured exports in 2003, from exports valued at £8.33bn in 2002 to exports of £6.37bn in 2003 – a reduction of 23.5%. Only food, drink and tobacco industries experienced an increase in the value of their exports in 2003, rising 8% since 2002. providing research and information services to the Scottish Parliament 22
•
Further information on the methodology and sampling techniques used for the Global Connections Survey are available on-line.
Figure 14: Manufacturing Exports – The results of Global Connections Surveys (2002 revised and 2003 provisional) (Source: Scottish Executive export statistics) £9.000 Annual Global Connnections Data (2002 revised -£bn)
£8.000
Value of exports (£Bill)
£7.000 £6.000 £5.000
Global Connections data (2003 provisional£bn)
£4.000 £3.000 £2.000 £1.000
Other Manufacturing
Industry group
Engineering & Allied Industries
Metals & Metal Products
Chemicals, Coke, Refined Petroleum Products & Nuclear Fuel
Wood, Pulp, Paper, Publishing & Printing
Textiles, Fur & Leather
Food, Drink & Tobacco
£0.000
Table 11: Manufacturing Exports – The results of Global Connections Surveys (2002 revised and 2003 provisional) (Source: Scottish Executive export statistics) Global Annual Global Connections data % change Connnections Data (2003 provisional- year on year (2002 revised -£bn) £bn) Food, Drink & Tobacco
£3.020
£3.25
8%
Textiles, Fur & Leather
£0.410
£0.385
-6.1%
Wood, Pulp, Paper, Publishing & Printing
£0.435
£0.435
0%
Chemicals, Coke, Refined Petroleum Products & Nuclear Fuel
£1.565
£1.53
-2%
Metals & Metal Products
£0.570
£0.550
-3.5%
Engineering & Allied Industries
£8.330
£6.370
-23.5%
Other Manufacturing
£0.55
£0.50
-9.1%
Total Manufacturing
£14.88
£13.02
-12.5%
providing research and information services to the Scottish Parliament 23
Figure 15: Export Destinations (Excludes the rest of the UK. Source: Scottish Executive Global Connections Survey - 2003 provisional)
European Union 55%
Africa 2% Australasia 1% Asia 9%
Middle East 4% Central/South America 3% North America 15%
•
Rest of Europe 11%
It can be seen from figure 15 above that in 2003, the main destination of Scottish exports was the European Union (55%), with 15% of exports going to North America and 11% to the rest of Europe. Scotland sold 9% of its exports to Asia in 2003
providing research and information services to the Scottish Parliament 24
Figure 16: EU Export Destinations (Source: Scottish Executive Global Connections Survey – 2003 Provisional) 2,000 1,800
Value of Exports (£Mill)
1,600 1,400 1,200
Total exports (£Mill)
1,000 800 600 400 200
Luxembourg
Portugal
Austria
Greece
Finland
Denmark
Sweden
Belgium
Italy
Spain
Netherlands
Eire
France
Germany
0
Country
•
Figure 16 above shows the spread of Scottish exports across the European Union. (It should be remembered however that the accession countries are not yet included in this data). In terms of the value of exports, Germany was the main destination for Scottish exports in 2003, with exports worth £1.94bn. This however was a 14.8% decrease in the value of exports to Germany from 2002 (£2.27bn)
•
France and Ireland were the next largest recipients of Scottish exports in 2003, valued at £1.25bn and £1.23bn respectively. The value of exports to France also fell from 2002 by 31.6% (£1.82bn in 2002). However, in 2002 Ireland was not in the top 3 European Union destinations of Scottish Exports. The value of Scottish exports to Ireland has increased by 53.8% from £0.8bn in 2002 to £1.23bn in 2003.
•
The Netherlands fell from third place in 2002 to 4th in 2003, with the value of Scottish exports to the Netherlands falling from £1.38bn in 2002 to £1.19bn in 2003, a decrease of 13.8%
providing research and information services to the Scottish Parliament 25
SOURCES Bank of England publications [Online]. Available at: http://www.bankofengland.co.uk/inflationreport/index.htm [Accessed 15 Dec 2004] Federation of Small Businesses (FSB). Index of success 2005. Available at http://www.fsb.org.uk/data/default.asp?id=24&loc=scotland Fraser of Allander Institute. Quarterly Economic Review p3-11 February 2005 HM Treasury. (2005) Forecasts for the UK Economy: Index 2004. Available at: http://www.hm-treasury.gov.uk/media/1AB/1A/forecast_feb2005.pdf NOMIS Official Labour Market Statistics. (2003) VAT registrations/de-registrations by industry 2002. Available at: http://www.nomisweb.co.uk [Accessed 10 Dec 2004] Office of National Statistics. (2004) Labour Market Statistics: Scotland. Available at: http://www.statistics.gov.uk/pdfdir/lmsscot0204.pdf [Accessed 15 Dec 2004] Royal Bank of Scotland. (2004). Scottish Retail Sales Monitor. Available at: http://www.royalbankscot.co.uk/Group_Information/RBS_and_the_Economy/Surveys/default.ht m [Accessed 15 Dec 2004] Scottish Council for Development and Industry (SCDI). (2004) Indicator. Winter 2004. Scottish Executive. (2004) Scottish Manufactured Exports Estimates. Available at: http://www.scotland.gov.uk/stats/bulletins/00289-00.asp [Accessed 15 Dec 2004] Scottish Executive. (2005) Quarterly GDP index. Available at: http://www.scotland.gov.uk/Topics/Statistics/18879/15394 [Accessed 22 March 2005] Scottish Executive. OECD GDP figures and Independent Scottish economic forecasts. Unpublished
providing research and information services to the Scottish Parliament 26
