1.     Introduction 

1.1         In March 2004, Comhairle nan Eilean Siar (CNES) in collaboration with Western Isles Enterprise (WIE) and Communities Scotland commissioned a study to provide detailed, up-to date information on the nature of the Western Isles Economy. Output from the study will be used to guide the policies and strategies of Community Planning Partners.   

 1.2         The five principal objectives of the study were as follows: 

I.       To construct a comprehensive set of up-to-date Regional Accounts for the Western Isles utilising a SAM approach (building on the work contained in the 1997 study and consistent with recognised SAM conventions and formats); 

II.     To compile a Western Isles occupational employment by industry matrix fully compatible with the core SAM; 

III.    To analyse the SAM and related data to provide comment on the current structure and recent performance of the Western Isles economy;   

IV.    To compare and analyse the results of objective III with the previous results of the 1997 Regional Accounts and provide comment on any changes to the Western Isles economy over that time;  

V.    To carry out a number of specific impact scenarios  using the SAM multiplier model ; and  

VI.    To develop a computer package, which will allow the project sponsors to complete impact analysis and simulations on the data on an in-house basis.

1.3         This report presents the findings relating to the first three of the study objectives but also goes some way towards identifying the most important changes that have occurred in the region since the 1997 study.

Structure of the report

1.4         Chapter 2 (Methodology) of the report describes the basic structure of the 2003 accounting framework. A great deal of new local data was collected and utilised in the construction process and Chapter 2 also describes the methods of data collection and sample coverage. Further, more technical, details of the construction process are detailed in Appendix 1 to the report.

1.5         Chapter 3 presents the balanced 2003 Western Isles SAM and occupation-employment satellite matrix.  These provide the basis for generating a number of alternative indicators of the performance of the Western Isles economy as described in the following chapter, Chapter 4 (Core Regional Analysis).

1.6         In addition to performance indicators such as Gross Regional Domestic Product (GRDP) and Gross Regional Domestic Expenditure (GRDE), Chapter 4 highlights the importance of different sectors and households in the region and identifies key changes in the nature of the Western Isles economy since the completion of the last regional accounts study. 

1.7         Chapter 5 (Multiplier Analysis) reports and discusses the results from using the SAM to produce output and employment multipliers.  These measure the effect on incomes and employment of external impacts such as changes in export demand or increased transfer income. Like chapter 4, it also identifies the changes that have occurred in the multiplier values of each sector and household group since the 1997 study.

1.8         Chapter 6 describes and analyses a number of “scenarios” agreed with the project sponsors.  These represent economic or social developments where the effects on the Western Isles economy are considered of interest.  The scenarios included a decline in the Western Isles aquaculture sector, growth in the population due to net in-migration, a switch in household consumption patterns and an investigation into the role of the construction sector in facilitating economic growth in the region.  Finally, Chapter 7 reports some comments and findings (the latter based primarily on responses to open-ended questions in the questionnaires) not presented elsewhere in the report.