Aquaculture sector - wider economic impacts: estimates

4. Direct Economic Activity

This section considers the economic impact that was directly attributable to the aquaculture sector in Scotland in 2018.

4.1 Direct Employment

In 2018 the aquaculture sector directly employed 6,260 people.

The companies that are active in this sector include those which do both production and processing activities. The direct employment by subsector which is outlined in Table 4‑1 has extracted processing employees from companies which predominantly do production activities and categorises these as processing employees.

The level of employment, and direct GVA, within the aquaculture processing sector was estimated using shares of employment in the fish processing sector that was either predominately associated with the output of either sea fisheries or aquaculture. Many of those employed will work in mixed facilities that process both aquaculture products and those from sea fisheries. Therefore, the level of employment in this sector is an estimate.

In 2018 processing employed 3,970 people or over 63% of the total employment supported by the aquaculture sector in Scotland. This included individuals who work in primary processing for finfish production companies. Salmon production contributed to a further 29% of employment, whereas other finfish production and shellfish production employed the remaining 8% of the sector’s workforce.

Table 4‑1 Direct Employment by Aquaculture Subsector in 2018

Source: BiGGAR Economics Analysis, note figures may not sum due to rounding

4.2 Direct Gross Value Added

The direct Gross Value Added contribution made by the Scottish aquaculture sector was estimated by adding the value of staff costs to the profits generated by the companies operating in the sector. This methodology was preferred over subtracting operational expenditure from turnover. This was because companies in their annual accounts report cost of sales which cover an entire production cycle instead of a fiscal year, the chosen methodology is easier to update and replicate.

In this way, it was estimated that in 2018 the aquaculture sector directly contributed £468 million Gross Value Added (GVA). A breakdown of the sector contribution by subsector is provided in Table 4‑2^[6].

Salmon production contributed around 54% of the direct GVA that was generated by the Scottish aquaculture sector. In 2018 aquaculture processing accounted for £196 million direct GVA or 42% of the sector’s direct contribution. Other finfish and shellfish production accounted for £22 million GVA.

Source: BiGGAR Economics Analysis, note figures may not sum due to rounding

4.2.1 Gross Value Added and Gross National Income

It should be acknowledged that the Gross Value Added (GVA), which is estimated in this study is different from the Gross National Income (GNI) ^[7]. The latter considers the value of production that is generated by companies and workers from Scotland. This is worth mentioning since some of the largest companies within the aquaculture sector are owned outside Scotland. When there is foreign ownership of an activity, the difference between the two measures is mostly dependent on the relative split of direct GVA between staff costs (mostly taking place in Scotland) and the returns accruing to capital (going abroad to the owners of this capital). These shares in turn depend on how capital intensive a sector is. The share of staff costs as a proportion of Direct GVA ranged from 31% in salmon production to 72% in shellfish production. These values will fluctuate significantly between years.

The economic impact of sectors and organisations are typically measured in terms of Gross Value Added, rather than Gross National Income, and therefore the GVA approach was used in this study.