Aquaculture sector - wider economic impacts: estimates

8. Summary of Impact

In 2018 the aquaculture sector contributed to the Scottish economy around £885 million Gross Value Added and 11,700 jobs.

8.1 Economic Impact

This study estimated that in 2018 the aquaculture sector contributed to the Scottish economy around £885 million Gross Value Added (GVA) and 11,700 jobs. In particular:

• the sector’s direct economic contribution was £468 million GVA and 6,260 jobs;
• the impact associated with spending across the supply chain was £360 million GVA and 4,250 jobs; and
• staff costs generated £57 million GVA and supported 1,190 jobs.

A breakdown of the GVA contribution made by each subsector is provided in Figure 8‑1. Salmon production was responsible for 66% of the 2018 GVA impact. This reflected the sector’s relative size within Scottish aquaculture as well as it being a high-skilled, relatively high-paying sector. Salmon production’s supply chain impact was even larger, around 86% of total supply chain impact. Aquaculture processing contributed around £269 million GVA, mostly resulting from the value that the sector directly added to the economy. Other finfish and shellfish production contributed around £31 million GVA.

Source: BIGGAR Economics Analysis

In 2018 the sectoral contribution in terms of employment supported was less skewed towards a single subsector within Scottish aquaculture. About 94% of the total employment supported by the aquaculture sector throughout Scotland came from salmon production and aquaculture processing. In particular, aquaculture processing, being a labour-intensive sector, had the largest direct employment contribution, 3,970 jobs. Shellfish production supports more employment than other finfish production, though it featured a larger share of part-time work.

Source: BiGGAR Economics Analysis

8.2 Fiscal Contribution

The Scottish aquaculture sector also contributed to public finances through taxation. It was estimated that in 2018 the sector contributed a total £94.1 million in taxation, including:

• £47.4 million in Corporation Tax;
• £18.1 million in Income Tax; and
• £28.6 million in National Insurance.

Salmon production accounted for most of the contribution of the sector to public finances, especially as a result of the Corporation Tax paid by the companies in the sector. Income tax and National Insurance contributions were similar in size for aquaculture processing and salmon production. This was because the lower number of employees in salmon production is offset by the larger earnings and taxes paid by its employees compared with those working in the processing sector. The tax contribution from shellfish and production of other finfish was around £4 million, or around 4% of impact.

Source: BiGGAR Economics

8.3 Multipliers

Based on the GVA and employment estimates for the sector it was possible to estimate the equivalent Type 1 and Type 2 employment and GVA multipliers for the sector. These figures allow to estimate the total impact of a £ of direct GVA and of a direct job supported by the sector.

It was estimated that in 2018 the Type 1 GVA multiplier for the Scottish aquaculture sector was 1.77 and the Type 2 multiplier for the Scottish aquaculture sector was 1.89. The Type 1 employment multiplier was 1.68 and the Type 2 employment multiplier was 1.87.

In Table 8‑1, the multipliers estimated as part of this study are compared to the existing multipliers from the 2016 Scottish Government Input-Output Tables. The multipliers estimated as a result of this study are relatively lower.

Source: BIGGAR Economics Analysis and Scottish Government (2019), Leontief Type 1 Table; Scottish Government (2019), Leontief Type 2 Table.

The multipliers of the aquaculture sector estimated in this study were broadly comparable to those of agriculture and forestry and manufacturing sectors. The latter were estimated by averaging the multipliers of the industrial sectors belonging to a single section of the Standard Industrial Classification (SIC) codes (e.g. A ’Agriculture, forestry and fishing’ and C ‘Manufacturing’). Aquaculture was excluded from the averaging of sector A.

Source: BIGGAR Economics Analysis

Source: BiGGAR Economics Analysis