Contents
1. INTRODUCTION 1
2. METHODOLOGY 5
2.1 Introduction 5
2.2 The Accounting Framework 6
2.3 Data Collection 11
2.4 The SAM Construction Process 18
2.5 The Estimation of the Western Isles Employment Matrix 20
2.6 The Balanced Western Isles SAM and Employment Matrix 20
3. CORE REGIONAL ANALYSIS 24
3.1 Introduction 24
3.2 Gross Regional Domestic Product and Expenditure 24
3.3 Sectoral Analysis 29
3.4 The Household Sector 36
3.5 Trade and Tourism 41
4. MULTIPLIER ANALYSIS 45
4.1 Introduction 45
4.2 Open IO and SAM Multipliers 45
4.3 SAM household multipliers 47
4.4 Employment Coefficients and Effects 48
4.5 Final Market Analysis 52
5. SCENARIO ANALYSIS 55
5.1 Introduction 55
5.2 A 20% Increase in Tourism Activity 56
5.3 Demographic Ageing and Decline 61
5.4 A 25% Increase in Local Processing from the Sea-Fishing Sector 64
5.5 Closure of Lewis Offshore 65
5.6 A 25% change in the cost of sea transport 67
6. FINAL REMARKS 70
6.1 Study Scope and Limitations 70
6.2 The Future 71
REFERENCES 73
APPENDICES 75
Appendix 1 Business Survey Questionnaire 75
Appendix 2 Household Survey Questionnaire 84
Appendix 3 SIC(92) Classification of industry groups 93
Appendix 4 Methods Used in SAM Construction 94
A4.1 The Valuation of Transactions 94
A4.2 The Treatment of Imports, Exports and Capital Transactions 95
A4.3 Technology assumptions used in producing symmetric production accounts 96
A4.4 Balancing the initial matrix 98
Appendix 5: Standard Occupational Classification: Minor Groups 99
Appendix 6: Tourist Expenditure, Western Isles 1999 102
LIST OF TABLES
Table 2.1 Business survey sample and employment coverage 14
Table 2.2 Household survey: geographical coverage 15
Table 2.3 Household survey: Council tax band coverage 15
Table 2.4 Sample characteristics of the 1999 visitor survey 17
Table 2.5 Western Isles SAM, 1997 (£'000) - Part 1 21
Table 2.6 Balanced employment matrix for the Western Isles, 1997 (FTEs) 23
Table 3.1 Western Isles Gross Regional Domestic Product, 1997 25
Table 3.2 Alternative estimates of Western Isles GRDP and GRDP per head 26
Table 3.3 Western Isles GRDP compared with estimates for other regions 26
Table 3.4 Composition of Western Isles GRDP, 1988/89 and 1997 27
Table 3.5 Western Isles Gross Regional Domestic Expenditure, 1997 28
Table 3.6 Sectoral contributions to employment, value added and output, Western Isles 1997 30
Table 3.7 Sectoral contribution employment and value-added, Western Isles, 1988/89 and 1997 32
Table 3.8 VAT Registered Enterprises by SIC Code, Western Isles, 1994 and 1998 34
Table 3.9 Sources of income by household type, Western Isles 1997 38
Table 3.10 Level and pattern of weekly expenditure (£) by household income level, Western Isles 1997 40
Table 3.11 Sectoral contributions to Western Isles balance of trade, 1997 42
Table 4.1 Open IO and SAM output multipliers 46
Table 4.2 SAM household multipliers, Western Isles 1997 48
Table 4.3 Employment coefficients, effects and multipliers, Western Isles 1997 49
Table 4.4 Occupation-employment effects, Western Isles 1997 51
Table 4.5 Source of Western Isles economic activity by final market 52
Table 4.6 Embodied skills analysis of Western Isles final demand 54
Table 5.1 Impact of 20% increase in tourism on the sectoral output values and factor payments, assuming unchanged visitor distribution 57
Table 5.2 Impact of a 20% increase in total tourism expenditure, assuming that the increase is due to one visitor type only 58
Table 5.3 Impact of increase in tourism on selected sectors, assuming each visitor type increases by 20% 59
Table 5.4 Impact on employment of 20% increase in tourism, assuming unchanged visitor patterns, Western Isles, 1997 60
Table 5.5 Population and age group projections 1997-2007, Western Isles 61
Table 5.6 Changes in total expenditure of household types as a result of population changes, Western Isles 1997 62
Table 5.7 Economic impacts of changes in 1997 population structure, Western Isles 62
Table 5.8 Employment effects of changes in 1997 population structure. Western Isles 63
Table 5.9 Doubled population reductions, Western Isles 1997 63
Table 5.10 Impact of demographic changes assuming doubled rates of population decline, Western Isles 1997 63
Table 5.11 The impact of a 25% increase in local processing of sea fishing output on Western Isles gross output levels, 1997 64
Table 5.12 Impact of 25% increased local fish processing on factor earnings, Western Isles 1997 65
Table 5.13 Employment impact of 25% increased local fish processing, Western Isles 1997 65
Table 5.14 The Impact of Lewis Offshore Closure on Western Isles Gross Output, 1997 66
Table 5.15 Impact of Lewis Offshore Closure on Western Isles Factor Earnings, 1997 66
Table 5.16 Impact of Lewis Offshore Closure on Western Isles Employment, 1997 67
Table 5.17 Sectoral Output Price Effects of a 25% Increase in the Cost of Sea Transport, Western Isles 1997 69
LIST OF FIGURES
Figure 2.1 Schematic Form of Western Isles SAM 8
Figure 2.2 Flow chart of stages in the SAM construction process 19
Figure 3.1 Salience Chart showing the relative importance of sectoral contributions to GRDP 31
Figure 3.2 Sectoral employment contributions, Western Isles 1997 33
Figure 3.3 Sectoral value added contributions, Western Isles 1997 33
Figure 3.4 Employment type by sector 36
Figure 3.5 Sources of income by household type, Western Isles 1997 38
Figure 3.6 Pattern of expenditure by household composition 40