NETWORK ECONOMIC INFORMATION SKYE & LOCHALSH ECONOMIC UPDATE OCTOBER 2003 HIGHLIGHTS The population of Skye & Lochalsh in 2001 was 12,136, an increase of 3.2% from 1991 and higher than the growth of 0.8% in the HIE area. The percentage of the population in Skye & Lochalsh aged 4-64 years has increased greatly from 1991, while the percentage of the population in younger age groups has decreased. There is a mean age of 40.8 years. The unemployment rate for Skye & Lochalsh is generally higher than that for the HIE area and is highly seasonal. In August 2003 the unemployment rate was 2.7%. In Skye & Lochalsh, male unemployment has decreased at a greater rate than female unemployment over the period 2001 to 2003. Figures for August 2003 show unemployment at 4% for males and 1.3% for females. The Wholesale, Hotels & Restaurants is the largest employer with 26.8% of the total workforce, followed closely by the Public Administration, Education & Health sector. Females largely dominate these sectors. A large percentage of employees (2.4%) work in companies with 1-4 employees, with only 12.6% working in firms with 100 or more employees. Skye & Lochalsh had the highest business start-up rate of all the LEC s in the HIE area of per 1,000 population in 2002. 1
INTRODUCTION This document provides information and analysis on the socio-economic profile of the Skye & Lochalsh Enterprise area (SALE). The data is mainly derived from the 2001 Census undertaken by the General Register s Office for Scotland (GROS) and from other national surveys undertaken by the Office for National Statistics (ONS). Where possible the most recent and accurate available data has been used. POPULATION Table 1 shows the change in the resident population in SALE compared to the HIE area and Scotland from 1991 to 2001. The population of the SALE area was 12,136 in 2001 accounting for 2.8% of the total HIE area population. Table 1: Resident Population, 1991-2001 1991 * 2001 Change % Change (1991 base) SALE 11,74 12,136 382 +3.2 HIE 430,361 433,74 3,384 +0.8 Scotland,083,330,062,011-21,319-0.4 Source: GROS 2001 Census *Based on non-revised 1991 Census population for LEC and HIE, but revised 1991 Census population for Scotland. In SALE there has been a population growth of 3.2% since 1991, higher than the growth experienced by the HIE area of 0.8%. This growth is influenced by the net inmigration experienced in SALE since the 1970 s. Age Structure Table 2 shows the changing age structure of the SALE area as a percentage of the total population, compared to the HIE area and Scotland. Table 2: Distribution of Population by Age, 1991-2001 (% of total population) Age Group SALE 1991 * SALE 2001 HIE 2001 Scotland 2001 0-4 6.3.4.4. -19 19.9 19.0 18.6 18.7 20-44 33.9 30.1 32.0 3. 4-64 22.2 28.3 26.7 24. 6-84 1.6 14.9 1.2 14.2 8+ 2.1 2.4 2.0 1.8 Source: GROS 2001 Census *Non-revised population figures from 1991. The percentage of the population aged 44 years or less decreased in the SALE area from 60.1% in 1991 to 4.% in 2001. This is lower than that for the HIE area as a whole, which was 6.0% in 2001. This is influenced by the tendency of the young to move outwith the SALE area, for example, to pursue further education. The percentage of the population aged 6 years or older also decreased, from 17.7% in 1991 to 17.3% in 2001. Thus, in SALE there has been a great increase in the percentage of people aged 4-64 years, from 22.2% in 1991 to 28.3% in 2001. 2
UNEMPLOYMENT Figure 1 shows the unemployment rate for the SALE area compared to the HIE area from January 2001 to August 2003. Figure 1: Unemployment Rates, 2001-2003 7 6 HIE SALE 4 3 2 1 - Source: NOMIS (ONS) The unemployment rate for the SALE area is shown to be consistently higher than that for HIE area for the time period shown, and is highly seasonal by nature. This indicates a reliance on seasonal activity for employment, in particular within tourism and primary sector industries. Over the time period, the unemployment rate has decreased from 6.2% in January 2001 to.4% (393 claimants) in January 2003. Unemployment by Gender Figure 3 shows the male and female unemployment trends for SALE from January 2001 to August 2003. 3
Figure 3: Male and Female Unemployment Rates, 2001-2003 9 8 Male Female All 7 6 4 3 2 1 0 Source: NOMIS (ONS) Note: Rates estimated using GROS Census 2001 population. Typifying most unemployment trends, the male unemployment rate is higher than the female unemployment rate in SALE. The unemployment rates both exhibit seasonal trends, indicating an equal reliance on seasonal employment, such as employment within tourism and primary sector industries. Male unemployment has decreased from 8% in January 2001 to 6.6% in January 2003 which is more than the decrease of female unemployment from 4.2% to 4.1% over the same time period. GROSS VALUE ADDED Gross value added (GVA) is a measure of the income generated by businesses after the subtraction of input costs (excluding wage and capital investment costs). Table 3 shows the gross value added per full-time employee for the Highland Council area in 2000, compared to Scotland. This is a useful measure of productivity. Table 3: Gross Value Added per Full-Time Employee, 2000 Area GVA per Full-Time Employee ( ) Manufacturing Services Highland 27,778 1,60 Scotland 36,799 18,781 Source: Scottish Executive, Scottish Production Database & Scottish Services Database This table highlights that the Highland Council area has a lower GVA per full-time employee than Scotland for both Manufacturing and Services. This suggests that productivity is slightly lower in the Highland area, and indeed SALE, compared to Scotland. The difference is greatest within Manufacturing, where GVA per full time employee is 27,778 in the Highland area, compared to 36,799 in Scotland. This is 4
influenced by the nature of the Manufacturing sector in the Highland Council area, where the businesses are smaller, relative to the rest of Scotland and are less likely to benefit from economies of scale. Additionally, Manufacturing businesses in the Highland area tend to produce outputs of a low monetary value, compared to the rest of Scotland. Nevertheless, in line with the overall trend for Scotland, the GVA per full-time employee in the manufacturing sector is almost twice the level of the services sector. EMPLOYMENT Figure 4 illustrates the distribution of employment by sector in the SALE and HIE area for 2001. Figure 4: Sector of Employment, 2001 30 2 20 SALE HIE 1 10 0 Source: GROS 2001 Census In SALE the Wholesale, Hotels and Restaurants sector, accounts for 26.8% of the total workforce (4.7% higher than that for the HIE area), the second highest percentage employed in that sector for all the LEC areas. This is as a result of the high dependence on tourism and many key tourist attractions being located in the area, such as Eilean Donan Castle, Dunvegan Castle, Clan Donald Visitor Centre, The Aros Experience and Talisker Distillery. The 2002 Highland Visitor Survey highlighted that the average tourist staying overnight in the Highlands and interviewed in Skye & Lochalsh stayed for 3.9 days in the Skye & Lochalsh area and spent an average of 118 per day. In terms of its appeal as a destination, the Skye & Lochalsh area attracts a relatively high level of hill walking activity. The main activity, however, as in other parts of the Highlands, is general sightseeing.
The Public Administration, Education and Health sector accounts for 2.% of the total workforce, 2.0% lower than that for the HIE area. This includes local authority staff and workers at public bodies in the area, for example, Sabhal Mor Ostaig. In line with other islands in the HIE area the Construction sector accounts for a larger percentage of the total workforce, than in the HIE area in general. This is influenced by the high costs associated with using mainland companies for construction projects. In addition, the Agriculture, Forestry & Fishing sector accounts for a larger percentage of the total workforce, than in the HIE area in general. Although in decline, this sector is still an important economic driver in SALE. In SALE, self-employment accounts for 1.6% of those aged 16-74 (10.6% in the HIE area). Part-time employment accounts for 13.4% of those aged 16-74 (13% in the HIE area) and full-time employment accounts for 32.9% of those aged 16-74 (38.% in the HIE area). Table 4 provides a more detailed account of employment by sector through highlighting the employment division by gender in SALE for 2001. Table 4: Employment in Sectors by Gender, 2001 Sector Male Female Total Percentage Agriculture and Fishing 423 7 480 8.7 Manufacturing 19 9 290.3 Energy & Water 49 4 3 1.0 Construction 479 31 10 9.3 Wholesale, Hotels & Restaurants 607 864 1,471 26.8 Transport & Communications 302 79 381 6.9 Banking, Finance & Real Estate, etc. 274 216 490 8.9 Public Admin., Education & Health 376 1,027 1,403 2. Other Sectors 229 190 419 7.6 Total 2,934 2,63,497 100.0 Source: GROS 2001 Census Note: Numbers may not total due to errors in rounding percentages. In line with other areas the service sectors, particularly Wholesale, Hotels & Restaurants and Public Administration, Education & Health, are dominated by females (there are 1.9 females for every male employed). Conversely, the Agriculture & Fishing, Manufacturing, Energy & Water, Construction and Transport & Communications sectors show.4 males for every female employed. Employment by Company Size Figure shows the employment breakdown for businesses by sizeband in 2001, not including self-employed. 6
Figure : Employment by Sizeband, 2001 30 2 SALE HIE 20 1 10 0 1 to 4 to 10 11 to 24 2 to 49 0 to 99 100 plus Source: 2001 ABI (NOMIS) No. of Employees in Company In 2001, the largest proportion of employees (2.4%) worked in companies with 1-4 employees, a much larger percentage than that for the HIE area (1.%). Conversely, a small percentage of employees are working in firms with more than 100 employees (12.6%), compared to the HIE area (26.2%). This illustrates the dominance of small firms in the SALE area. Business Starts Figure 6 shows the quarterly rate of new business start-ups per 1,000 population in SALE and the HIE area, from 2002 to 2003. Figure 6: Rate of New Business Start by Area, 2002-2003 2.0 1.8 1.6 SALE HIE 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Q1/2002 Q2/2002 Q3/2002 Q4/2002 Q1/2003 Source: Committee of Scottish Clearing Banks 7
Table shows the number of new business start-ups per 1,000 population in SALE, the HIE area and Scotland in 2002. Table : New Business Start-Ups by Area, 2002 Area Start-Ups Start-Ups per 1,000 Population * SALE 61.0 HIE 1,60 3.8 Scotland 18,18 3.7 Source: Committee of Scottish Clearing Banks *Figures estimated using population from GROS Census 2001 The SALE area has a business start-up rate of per 1,000 population, higher than any other LEC in the HIE area. E-BUSINESS Table 6 provides information from the 2003 E-Business Survey. From the businesses surveyed, it looks at the percentage within SALE and the HIE area who have access to the Internet, have their own website, and use broadband. In addition it looks at the percentage of businesses which have facilities for making payments to suppliers online and allowing customers to order or make payments on-line. Table 6: E-Business, 2003 Area Access to Internet Website Adoption Broadband Make Payments to Suppliers On-Line Allow Customers to Order On-Line Allow Customers to Pay On-Line SALE 7% 4% 1% 28% 22% 18% HIE 72% 42% % 20% 1% 12% Source: Highlands and Islands Enterprise E-Business Survey In SALE, 7% of businesses have access to the Internet, compared to 72% in the HIE area. In addition, 4% of businesses have adopted a website, compared to only 42% in the HIE area. More significant indicators of high e-business adoption in SALE exist in the percentage of companies that make payments to suppliers and that allow customers to order and to pay on-line. Thus, in SALE there is generally higher levels of e-business adoption than in the HIE area. This is influenced by the large tourism sector in SALE, where high levels of e-business are typically prevalent. 8
SUMMARY The SALE area is experiencing a growing population and there has been a large increase in the percentage of the population aged 4 to 64 years. The unemployment rate in SALE tends to be higher than that for the HIE area, and is highly seasonal, indicating a reliance on the primary sector and tourism for employment. The reliance on tourism activities partly explains why the Wholesale, Hotels and Restaurants sector is the largest employer. The Public Administration, Education and Health sector, is also a prominent sector with large employers such as Sabhal Mor Ostaig. In addition, the Construction and the Agriculture, Fisheries & Forestry sectors are also important employers in SALE relative to that in the HIE area. Small firms dominate employment, in line with the HIE area in general. The business start-up rate is the highest in the HIE area ( per 1,000 population) and SALE also boasts some of the highest levels of e-business adoption in the HIE area. CONTACT INFORMATION If Network staff have any queries about the information contained in this document, or any other economic issues, please contact HIE s Strategic Planning and Research Team: Senior Economist Alastair Nicolson (01463) 244 214 ai.nicolson@hient.co.uk Economist Claire McDonald (01463) 244 228 claire.mcdonald@hient.co.uk Research Assistant Heather Taylor (01463) 244 320 h.taylor@hient.co.uk 9