Scottish Annual Business Statistics 2021

Scottish Annual Business Statistics (SABS) is largely based on data from the Annual Business Survey (ABS) (formerly Annual Business Inquiry (ABI)) conducted by the Office for National Statistics (ONS).

The ABS is the UK’s key resource for understanding the detailed structure and performance of businesses across the UK, classified to the UK Standard Industrial Classification (SIC) system. In SABS, Scotland level data is compiled by aggregating data into industries according to the SIC code of each individual business site (e.g. factory, shop etc). A SIC code is allocated to a business site according to its main activity. 

Within SABS, estimates by industry sector for a range of financial and employment variables are published for Scotland, Scottish local authority areas and business ownership groups. These estimates are presented mainly as monetary values at current prices, and give a snapshot of business activity that can be used to understand the level of contributions to the Scottish economy.

More information on quality and methodology is available in ONS background information to the Annual Business Survey (ABS).

Reduced ABS response due to Coronavirus (COVID-19) pandemic

Usually, the data for Scotland is based on ABS returns from around 8,000 businesses. However, the returns for 2019 and 2020 were lower at approximately 6,000 returns – this was because the COVID-19 pandemic made it more difficult to contact respondents in order to process survey returns. This means that the 2019 and 2020 estimates are subject to more uncertainty than usual. The ABS returns were around 7,600 businesses in 2021.

However, steps were taken to strengthen the estimates for 2019 by incorporating Value Added Tax (VAT) turnover data. More information on the 2019 estimation process is available, please see SABS 2019 under Time Series Analysis Caveats.

The Annual Business Survey (ABS) is an annual survey of businesses registered for Value Added Tax (VAT) and/or Pay As You Earn (PAYE). This covers the primary industries, manufacturing, construction and service industries (including distribution) which represent the UK Non-Financial Business Economy. This is about two thirds of the UK’s whole economy in terms of Gross Value Added. Broadly, this covers:

Services – includes motor trades, wholesale, retail, transport, accommodation, food services, information, communication, real estate, professional, scientific, technical, administrative, private sector health, private sector education, entertainment.

Primary Industries – includes agriculture support services, hunting, forestry, fishing, oil & gas extraction, energy generation & supply, water & waste management.

Manufacturing – includes manufacture of food, beverages, textiles, wood products, refined petroleum, chemicals, pharmaceuticals, plastic products, metals, metal products, machinery, computers, electrical/optical products, transport equipment, furniture, repair & installation of machinery/equipment.

Construction – includes civil engineering, construction of buildings and specialised construction trades such as plumbers, electricians and plasterers.

Exclusions

The statistics do not cover the whole economy, omitting the financial sector, parts of agricultural sector and parts of the public sector.

The following sub-classes of Standard Industrial Classification (SIC) code 1 (Crop and animal production, hunting and related service activities) are omitted:

01.1 – Growing of non-perennial crops 
01.2 – Growing of perennial crops 
01.3 – Plant propagation
01.4 – Animal production
01.5 – Mixed farming

Within Scottish Annual Business Statistics (SABS), the services sector is defined as division codes 45 to 96 of Standard Industrial Classification 2007 (SIC07). Although the publication refers to the services sector for simplicity, it should be noted that the figures quoted do not relate to the entire services sector, but only to those sectors covered by the ABS. The main industries excluded from the services sector are:

• Financial and Insurance activities (Section K);
• Public Administration and defence (Section O);
• Education (public provision in Section P); and
• Health (SIC 86.2, public provision in SIC 86.1 and 86.9 in Section Q).

Oil & Gas

ABS data relating to Oil & Gas extraction (SIC 6) is allocated to UK regions (including Scotland) according to the address at which the business is registered - onshore and offshore Oil & Gas extraction and activities are allocated in this way. GVA associated with off-shore activity, under UK regional accounts procedures, is normally allocated to a separate ‘Extra Regio’ category rather than allocated to a region within the UK.

Removal of Insurance and Reinsurance data (covers SIC 65.1 & 65.2)

In line with Office for National Statistics (ONS) ABS releases, data for the Insurance and Reinsurance sector (SIC 65.1 and 65.2) continues to be removed from the Scottish Annual Business Statistics (SABS) results for all years from 2008 onwards. The previously published ABS data for the Insurance and Reinsurance sector has been excluded due to on-going volatility. This does not affect any other industry sectors and, as the Insurance and Reinsurance sector data has been removed for all years in the series, this does not affect time series analysis.

Background history is that data for this small part of the Financial and insurance sector (Insurance & reinsurance only) has been collected by the ABS since 2008 and was previously included in results. This was the only part of Financial and Insurance Activities (Section K) covered by the survey. As with any new time-series, estimates for these industries remained experimental while ongoing quality assurance took place. This quality assurance led to data for this sector being revised substantially with a break in the series between 2009 and 2010. Following discussions with key users, ONS then decided to remove this experimental series from ABS releases due to the continued volatility of the data and to allow for a more detailed quality assessment to be undertaken. Updates on this will be made available when known. As previously stated, removal of these series does not affect other industries published as part of this release and also has no impact on any other financial statistics published by ONS.

Additional Pay-As-You-Earn (PAYE) Units – Impact on SABS Results 2015-16

As described in Improving the Coverage of the Standard Business Survey Population, published by the Office for National Statistics on 21 December 2015, the coverage of the ONS Standard Business Survey Population expanded to include a population of solely Pay-As-You-Earn (PAYE) based businesses. These businesses were included for the first time in the population for the Annual Business Survey (ABS) 2016.

At the UK level, there was an increase of approximately 92,000 solely PAYE-based businesses which represents an approximate 4% increase in the number of businesses in the overall population, with nearly all (99.3%) in employment size-band one (zero to nine employees). For Scotland, there was an increase of 6,875 solely PAYE-based businesses, which similarly represents an approximate 4% increase in the number of businesses in the Scottish population. Please note that calculations were carried out on (final) 2015 and (provisional) 2016 data.

For more detail, please see SABS 2016 under Time Series Analysis Caveats.

The Annual Business Survey (ABS) is a valuable source dataset which is used alongside a number of other datasets in the production of macro-economic statistics for Scotland and the UK as a whole.  It is important to note that overall growth rates associated with the ABS are not comparable to the official growth rates for the whole economy given that significant sectors of the economy are not included in the ABS and the results have not been balanced with other datasets. The Scottish Annual Business Statistics (SABS) statistics are therefore best suited to analyses of individual industries rather than the economy as a whole.

The SABS data allows analysis of business structure, ownership and location within detailed sectors of the Scottish business economy. SABS figures are used extensively, by the Scottish Government, to inform sectoral policy and regional/local economic development.

The SABS results can be used to answer questions such as:

• how much value has been created in a particular industry, and how many people are employed by it?
• has there been a shift in activity from one industrial sector to another, and which sub-industries are driving the change?
• are any industries particularly dominant in specific local authority areas?
• how productive is a particular industry?

Data on purchases for 2012 onwards has been produced using a new Purchases Apportionment Methodology (PAM) for the apportionment from the reporting unit purchases to the local unit level. This new method was introduced to preserve the additivity of purchases components values to the total purchases. This has introduced a discontinuity in the purchases and GVA data series with 2008 to 2011 still calculated using the original method.

The change in the calculation of purchases (and hence GVA) has minimal impact for the large majority of sectors. However, the industry affected to the greatest extent is 'Gambling and Betting (SIC 92)' where there is volatility for a small number of multi-site businesses. The sampled businesses within this Division provide details of the “amounts payable to winning customers” as part of their purchases. The new apportionment method has led to volatile local estimates of payments to winning customers which then also affects other associated variables, like total purchases and GVA. Additional work and analysis is required by the Office for National Statistics (ONS) to identify further improvements to the methodology, and estimates, to reduce this impact while maintaining the additivity. Until this is completed, regional Purchases and GVA figures for Division 92 (Gambling and betting activities) should be viewed with caution.

More detail of PAM change can be found in this Information Paper.​​​​ ​​A detailed 2012 region by industry impact assessment has also been published by the ONS.

SABS 2021

As detailed below, Scottish Government analysts used an alternative methodology for the 2019 figures. These 2019 figures (using this same alternative methodology) are again published in Scottish Annual Business Statistics (SABS) 2021. This means that 2008-18 and 2020-21 SABS figures will match any published Office for National Statistics (ONS) Annual Business Survey (ABS) estimates for Scotland, whereas 2019 SABS figures will differ to ONS estimates for some variables e.g. Turnover & GVA.

There is also continuing impact of Purchases Apportionment Methodology (PAM) on purchases variables as detailed below under SABS 2013 to 2017. This impacts the data from 2012 onwards.

SABS 2020

In 2020, the Annual Business Survey asked businesses for information on furlough payments made through the Coronavirus Job Retention Scheme. Minor adjustments were made to prevent double counting in the subsidies data.

SABS 2019

In 2019, 53% of sampled businesses were included in the final Annual Business Survey (ABS) results UK-wide. The average response rate in previous years was approximately 75%. The 2019 rate was lower than usual because the coronavirus (COVID-19) pandemic made it more difficult to contact respondents in order to process survey returns. 

For Scotland, this means that the SABS results are based on a lower number of ABS responses than usual. The SABS results for 2019 are based on 6,100 ABS responses from businesses with a presence in Scotland, this is down on the 2018 survey response of 8,100 responses.

As shown in the table below, there has been a drop in response from businesses of all sizes, except the largest businesses (with 250 or more employees). 

ABS Returns - Businesses with a presence in Scotland - 2018 & 2019

In order to combat against this fall in the ABS response, we have taken steps to strengthen the estimates for 2019 by incorporating Value Added Tax (VAT) turnover data, which is collected by HM Revenue and Customs (HMRC) as part of the taxation process. VAT information is returned for all UK businesses with a turnover above the threshold and for those businesses below the threshold that choose to do so. More background can be found in VAT turnover data in National Accounts: background and methodology - Office for National Statistics

For those businesses not providing an ABS return in 2019, but that have an ABS turnover estimate in 2018, we have estimated ABS turnover for 2019 by applying the 2018 to 2019 turnover per employee change from the VAT turnover data. We have then gone on to estimate the following variables (and component parts) based on this new estimated ABS turnover for 2019:

• Gross Value Added at Basic Prices
• Purchases of goods & services
• Total Output at Basic Prices

In broad terms, the VAT turnover data are used to improve the coverage of smaller businesses. This combines the strengths of the ABS returns, with the wider coverage of turnover in the VAT dataset. However, this means that we are departing from the standard ABS regional estimation in 2019 – so our estimates for Scotland for 2019 do not match those published by the Office for National Statistics. However, this is the case only for turnover and the other variables listed above.     

SABS 2016

As described in Improving the Coverage of the Standard Business Survey Population, published by the Office for National Statistics on 21 December 2015, the coverage of the ONS Standard Business Survey Population has been expanded to include a population of solely Pay-As-You-Earn (PAYE) based businesses.

These businesses were included for the first time in the population for the Annual Business Survey (ABS) 2016.  At the UK level, there was an increase of approximately 92,000 solely PAYE-based businesses represents an approximate 4% increase in the number of businesses in the overall population, with nearly all (99.3%) in employment size-band one (zero to nine employees).  For Scotland, there was an increase of 6,875 solely PAYE-based businesses, which similarly represents an approximate 4% increase in the number of businesses in the Scottish population.  

To assess the impact of the additional businesses on the results for Scotland, new estimates for 2015 were calculated using the new extended population (referred to as 2015paye). These results have been compared with the 2015 results published in the SABS 2016 publication.

Users should note that these additional businesses will not be included in historic SABS data. The new 2015paye estimates have been calculated so users can see year-on-year changes on a consistent basis – note that that these are only provided in the impact table (by division) available in this historic SABS 2016 report, all other 2015 figures in the SABS 2016 publication exclude these additional businesses.

In the SABS estimates published in June 2018, the level of approximate gross value added at basic prices (aGVA) of the Scottish non-financial business economy for 2015 was estimated to be £87,374.5 million. The impact of the addition of solely Pay-As-You-Earn (PAYE) based businesses into the population would have increased the estimated aGVA by £734 million to £88,108.5 million; an increase of 0.8%.

The SIC 2007 divisions that have been most affected by the change are:

96 - Other Personal Service Activities

82 - Office Administrative, Office Support and Other Business Support Activities

74 - Other Professional, Scientific and Technical Activities

Combined, these three divisions would have seen an increase in estimated aGVA of £319.6 million; an increase in the level of aGVA from £2,846.0 million to £3,165.6 billion.

SABS 2013 to 2017

Data on purchases for 2012 onwards has been produced using a new Purchases Apportionment Methodology (PAM) for the apportionment from the reporting unit purchases to the local unit level. This new method was introduced to preserve the additivity of purchases components values to the total purchases. This has introduced a discontinuity in the purchases and GVA data series with 2008 to 2011 still calculated using the original method.

The change in the calculation of purchases (and hence GVA) has minimal impact for the large majority of sectors. However, the industry affected to the greatest extent is 'Gambling and Betting Standard Industrial Classification (SIC) code 92' where there is volatility for a small number of multi-site businesses. The sampled businesses within this Division provide details of the “amounts payable to winning customers” as part of their purchases. The new apportionment method has led to volatile local estimates of payments to winning customers which then also affects other associated variables, like total purchases and GVA. Additional work and analysis is required by ONS to identify further improvements to the methodology, and estimates, to reduce this impact while maintaining the additivity. Until this is completed, regional Purchases and GVA figures for Division 92 (Gambling and betting activities) should be viewed with caution.

More detail of PAM change can be found in this Information Paper. A detailed 2012 region by industry impact assessment has also been published by ONS.

SABS 2012 

In line with Office for National Statistics (ONS) ABS releases, data for the Insurance and Reinsurance sector (SIC 65.1 and 65.2) has been removed from the SABS results for all years from 2008 to 2012. The previously published ABS data for the Insurance and Reinsurance sector has been excluded due to on-going volatility while ONS carry out a more detailed quality assessment. This does not affect any other industry sectors and, as the Insurance and Reinsurance sector data has been removed for all years in the series, this does not affect time series analysis.

SABS 2011 (impact on 2008-09 data)

Please note that validation of data returns for 2011 highlighted that a small number of businesses within the Insurance and Reinsurance sector (SIC 65.1 and 65.2) were returning global figures rather than UK only. A revised 2010 estimate (together with new 2011 data) are now available in this publication. However, any global figures reported will remain in 2008 and 2009 published data in line with current Annual Business Survey (ABS) revisions policy. This can have a significant impact on Insurance, reinsurance, professional, scientific and technical activities (Section KM) time series data, as well as overall Totals, in particular local authority areas. Results for this sector are experimental and any comparisons between years should be undertaken with caution.

SABS 2010

Further Education (FE) Colleges were reclassified as Central Government entities on 13 October 2010, transferring FE Colleges from the private/business sector to the public sector.  This change brings FE Colleges out with scope of ABS survey from 2010 onwards, which represents a step change in the 2010 results for SIC 85 compared to data for earlier years.

SABS 2009

The data, from 2008 onwards, are published on a UK Standard Industrial Classification (SIC) 2007 basis – data pre-2008 were published on a SIC 2003 basis.  Updates to the SIC are required to enable it to more accurately reflect the structure of the modern economy - SIC 2003 was replaced by SIC 2007 in January 2008. The revision was motivated by the need to adapt the classification to changes in the world economy. The revised classification reflects the growing importance of service activities in economies over the last fifteen years, mainly due to the developments in information and communications technologies.

The employee/employment data published in SABS, from 2008 onwards, are based on Business Register and Employment Survey (BRES) – previous years SABS employee data were based on the employment part of the Annual Business Inquiry (ABI/1).  The BRES replaced and integrated the Business Register Survey (BRS) and the ABI/1 in 2009 (note that there was a pilot of BRES in 2008 which allowed 2008 BRES estimates to be produced). For businesses that are surveyed by BRES, the regional and local estimates of employment are more accurate (than those from the ABI/1) because, rather than producing data by a headquarter-based apportionment model, they are obtained directly from data reported at site level (shop, office, factory, etc). 

The 2008 and 2009 ABS followed a similar sample selection criteria and were both sampled on a SIC 2007 basis. It is important to note that 2009 marked the full introduction of the BRES, this and the change to SIC 2007 may lead to some discontinuity with businesses moving from one SIC to another between years. It is not unusual for some businesses to change SIC code over time, but there are some particular movements between 2008 and 2009 that users should be aware of e.g. a large number of landscape business sites have moved from SIC 01 (Crop and animal production, hunting and related service activities) to SIC 81 (Services to Building and Landscape Activities) between 2008 and 2009 – this is a result of the change from SIC03 (where landscape businesses were included with the agricultural sectors) to SIC07 (where landscape businesses fall under the services sector).

Insurance and Reinsurance (SIC 65.1 and 65.2) data is published for 2008 onwards – this is the first time that these data have been included in SABS. Please note that SIC 65.3 (Pension funding) is still omitted from the SABS results.

SABS 2008

ONS improved the sample design for the 2008 survey which means that the results for 2008 onwards cannot be compared with historical trends. Although this temporary loss of comparability over time is a downside - it means that the results for 2008 onwards are more accurate, and comparisons can still be made between sectors across the UK. More details are provided below on the change in sample design due to SIC 2007 and the complete re-allocation of the sample.

Notwithstanding, the change in sampling, the high energy prices in 2008 have had a significant impact on the "Remaining Sectors" results for Scotland in 2008.

Where necessary, figures have been rounded to the nearest final digit shown. Consequently, there may be slight discrepancies within a table between totals and the sums of constituent items.

The following symbols are used within the Scottish Annual Business Statistics (SABS)  data:

[w] none recorded in survey

[c] Information suppressed to avoid disclosure

[x] data is not available

The sampling frame used for the Annual Business Survey (ABS) is the Inter Departmental Business Register (IDBR), which consists of companies, partnerships, sole proprietorships, public authorities, central government departments, local authorities and non-profit making bodies. The main administrative source for updating the IDBR is the HM Revenue and Customs (HMRC) for Value Added Tax (VAT) and Pay-As-You-Earn (PAYE)  details.

Each legal unit is classified to a single activity, whether it is wholly or mainly engaged in that activity. The nature of a business can change with time, possibly because another business has been absorbed in a take-over. Some businesses have a very significant secondary activity, perhaps completely different from their main activity, and a small change of direction can lead to a new main activity and to the reclassification of the business. Other changes may arise from improvements to classification data held on the IDBR as a result of new information received about individual businesses. The reclassification of businesses for reasons such as these contributes to the year on year changes in the figures published.

The Annual Business Survey (ABS) sample is designed as a stratified random sample of UK businesses from the Inter Departmental Business Register (IDBR). The survey population or universe is stratified by Standard Industrial Classification (SIC 2007), employment, and country using the information from the IDBR. The sampling scheme is designed to give best estimates of the population totals for a given sample size and involves selecting all the largest businesses with a progressively reducing fraction of smaller businesses. This method ensures the sample size is kept to a minimum.

The inquiry results are grossed up to the register population, so that they relate to all active UK businesses on the IDBR for the sectors covered.

Scottish sample

Since 1998, the Scottish Government has funded an enhanced ABS sample in Scotland, to improve the quality of Scottish figures. In 2021, around 2,600 extra firms in Scotland were sampled as a result of this "boost", giving a total sample size in Scotland of around 8,100 firms.

Changes to the sample

From 2008 onwards, the sampling stratification (using the Neyman methodology) and resultant estimation has been carried out on a SIC 2007 basis.

Please note that a sample re-optimisation has been included in the estimates for 2016. This is carried out by ONS to improve the efficiency of the sample estimation and reduce sampling variability as part of the regular process to improve estimates. Please see Table below for 2021 Sampling figures:

The 2019 and 2020 response rates were significantly lower than usual because the coronavirus (COVID-19) pandemic made it more difficult to contact respondents in order to process survey returns. 

For Scotland, this means that the Scottish Annual Business Statistics (SABS) results are based on a lower number of Annual Business Survey (ABS) responses than usual. The SABS results for 2019 are based on 6,100 ABS responses and for 2020 on 6,300 ABS responses from businesses with a presence in Scotland. The ABS returns were around 7,600 businesses in 2021. This is still lower than the 2018 survey of 8,100 responses.

The Statistics of Trade Act 1947 prohibits the disclosure of any information relating to an individual undertaking without the consent of the person carrying on that undertaking. Rigorous checks have been made to ensure that information relating to individual businesses has not been disclosed, either directly or by deduction, in any of the figures released. Similar precautions will be taken in safeguarding the confidentiality of returns in the preparation of any ad-hoc analyses.

Factors are produced to enable estimates for all businesses classified to each Standard Industrial Classification (SIC 2007) code to be compiled from data provided by responding businesses. These factors are calculated for each employment size-band within each SIC  and are equivalent to the ratio of responding businesses to the total number of businesses. Northern Ireland and Scotland are sampled and estimated for separately, England and Wales are sampled separately but are combined for the estimation procedure.

Returns for the few large non-responders are estimated for individually. This estimation is normally based on summary data received from the business, or on the business's return to the survey in the previous year adjusted to take account of the likely change in the value of trading over the period.

Regional Estimation

The business unit to which Annual Business Survey (ABS) questionnaires are sent is called the reporting unit. For ABS, the reporting unit represents an enterprise, which may consist of one or more sub-units (called local units). For example, an enterprise might be the head office for a group of shops. An enterprise may therefore have local units at different locations, and may carry out more than one type of economic activity.

To produce the regional estimates, the reporting unit data returned by each business are divided amongst its local units. Each local unit’s allocation depends on the size of its employment, the industry it is in and its geographical location. This is achieved using a standard statistical modelling technique called regression analysis.

Local unit employment is obtained from the Business Register and Employment Survey (BRES), which collects data from local units, rather than enterprises. Results are then aggregated for each region /country and industry, using the industry classification of the local units. Each local unit is assigned a single SIC code, which corresponds to the unit’s principal activity. Where more than one type of economic activity is carried out by a local unit or enterprise, its principal activity is the activity which contributes most to the value of the unit. Hence, although the sum of the regional results for the whole business economy will match the total for the national results, the sum of the regional results by industry will not necessarily match the UK industry totals, as local units might not all share the same industry classification as their parent units.

Changes to the regional weighting methodology were introduced to ABS from the 2009 regional results onwards.  Further information on the methodology of the approach and analysis of the impact can be found in the ONS published note Weighting in the Regional System  - September 2011

Note that, as BRES is not carried out at the same time as ABS, differences in the timing of responses from ABS and BRES can lead to some reduction in the quality of the apportionment method.

More information on methodology used to compile regional ABS statistics is available in ONS background information to the Annual Business Survey (ABS).

Within Scottish Annual Business Statistics (SABS), business ownership is defined as:

• UK (Scotland registered)
• UK (registered in RUK)
• Abroad

Country of ownership is either UK or Abroad (outside the UK). Business country of ownership is determined by the nationality of the ultimate parent of the business (i.e. the institutional unit, proceeding up a business’ chain of control, which is not controlled by another institutional unit). Where control of the business is shared, country of ownership is determined by the country of residence of the majority ultimate owner. Enterprise groups with foreign ownership are identified using data provided by Dun & Bradstreet. All businesses that do not belong to an enterprise group, and are therefore not under the control of another institutional unit, are classified as UK-owned. 

Once it is determined that an enterprise is UK owned, the next step is to classify businesses into whether they are Scotland registered or registered in the Rest of the UK (RUK). Enterprises, and their associated local units, are classified as Scotland registered if the enterprise’s Value Added Tax (VAT) / Pay-As-You-Earn (PAYE) registered office address is in Scotland. Enterprises, and their associated local units, are classified as registered in RUK if the enterprise’s VAT/PAYE registered office address is, outside Scotland, elsewhere in the UK.  

For 2008 data onwards, Scottish Government analysts have merged Business Register and Employment Survey (BRES) (employment survey) and Annual Business Survey (ABS) (financial survey) results in order to produce consistent "per employment" totals (e.g. GVA per Head). However, the BRES and ABS are sampled at different times of the year so where a BRES employee/employment estimate cannot be found or is significantly different for a business within the ABS, employee/employment totals are set to their values from the Inter-Departmental Business Register (IDBR).

The Total Employees/Employment variables included in SABS are based on a head count and not a Full Time Equivalent (FTE) measure. This distinction is particularly important for sectors with high levels of part time employment (e.g. Retail and Accommodation & Food Service activities) especially when comparing Per Head figures.

Employees in BRES are defined as: An employee is anyone aged 16 years or over that an organisation directly pays from its payroll(s), in return for carrying out a full-time or part-time job or being on a training scheme. It excludes voluntary workers, self-employed, working owners who are not paid via PAYE.

Employment in BRES is defined as: Employees + Working owners who are not paid via PAYE.

Please note that Scottish Annual Business Statistics (SABS) now provides just “per employment” figures for the productivity measures – older SABS publications led with “per employee” figures. Change was made due to a change in the treatment of working owners, in the underlying BRES data (used in SABS).

From the 2011 survey, BRES treats working owners of limited companies as employees rather than working owners (as was previously the case) – and as part of this change in the BRES survey it was identified that in the past there was some double counting of working owners of limited companies (i.e. they were being counted as working owners and employees).

The BRES employment and employee data from 2010 onwards used in SABS have been adjusted to take account of these changes – however, this presents a break in the series with the  employee/employment data for 2010 onwards not being strictly comparable to the 2008-09 employee/employment data. Although the employee and employment data have both been affected by these changes, the impact was larger for the employee data than it was for the employment data - and therefore to maintain as consistent a time series as possible the SABS publication now just provides “per employment” measures of productivity.

Alternatively, Office for National Statistics (ONS) publishes sub-regional labour productivity  figures in terms of GVA per hour worked and GVA per filled job.

Scottish Annual Business Statistics (SABS) figures are largely based on annual surveys of businesses. In the context of overall Scottish figures, year-on-year differences are sometimes less obvious as they can be compensated for by other changes. However, at a more disaggregate level, such as sectoral or local authority area, changes in a small number of large companies can have a have a very marked effect on figures from one year to the next.

The business economy is constantly evolving as businesses merge, are taken over, or simply change the main focus of their business. These changes can result in the industry classification of a business changing.

For example, if a business undertakes both manufacturing and wholesale activities, but most of its employment is within manufacturing, it will be classified to manufacturing. If the employment were to change substantially so that the majority worked in wholesale then the industry classification would change and the whole of the businesses turnover, for example, would move from manufacturing to wholesale. In industries where movements are common, or where large businesses are involved, these changes can themselves sometimes cause large changes in Annual Business Survey (ABS) estimates. This should be taken in to consideration when changes over time are being assessed.

Estimates derived from samples invariably produce results which differ from those that would have been obtained from a complete census of all businesses. If a number of different samples were selected then each would produce a different result. Sampling errors measure the extent to which these estimates can be expected to differ from the 'true' value. The standard error is the estimated value of the sampling error – the closer the standard error to zero, the more reliable the estimate.

Standard Errors at Local Authority area level for 2012 to 2018 and 2020 to 2021 are available in the Tables published in Scottish Annual Business Statistics (SABS) 2021. Note that we have not produced Standard Errors for 2019 estimates, it has not been possible to produce these on account of the change in the estimation process which incorporates Value Added Tax (VAT) turnover data as detailed in “SABS 2019” under “Time Series Analysis Caveats” heading.

The employment and employee estimates are largely based on Business Register and Employment Survey (BRES) data, sampling errors for BRES estimates are provided at a regional and local level in Tables by the Office for National Statistics (ONS).

In addition to sampling errors there is the potential for non-statistical errors which cannot be easily quantified. Examples where these errors may occur are deficiencies in the sampling frame (Inter Departmental Business Register) and errors made by respondents in completing the survey forms. More information on methodology used to compile regional ABS statistics is available in ONS background information to the Annual Business Survey (ABS).

In general, Scottish Annual Business Statistics (SABS) follows the Revisions Policy for the Office for National Statistics (ONS) Annual Business Survey (ABS) results i.e. the latest results are provisional until the following year when they may be revised as a result of late returns or information received in the course of the following year's inquiry.

So, for example, within SABS 2021 the latest results for 2021 are provisional and will be made final when they are re-published within SABS 2022 - at which point they may be revised due to late returns. Likewise the results for 2020 within SABS 2021, have been revised since SABS 2020 and are now final.

Although the general rule is to only revise back one year, if revisions have a significant impact on estimates for Scotland, then we may revise back the entire time series. Significant revisions of this sort, and their treatment within SABS, will be highlighted at the time of the release.

Statistics for the UK, English Government Office Regions, Scotland, Wales and Northern Ireland are produced by the Office for National Statistics (ONS). However, please note that due to the 2019 estimation process used for Scottish Annual Business Statistics (SABS) estimate for 2019, our estimates for Scotland for 2019 do not match those published by the ONS. This is the case for the following variables (and component parts):

• Turnover
• Gross Value Added at Basic Prices
• Purchases of good & services
• Total Output at Basic Prices

Gross Value Added (GVA)

The Scottish Annual Business Statistics (SABS) results include approximate Gross Value Added at 'basic prices' (GVA). There are differences between the Annual Business Survey (ABS) approximate measure of Gross Value Added and the GVA measures published in UK and Scottish National Accounts data. It is important to emphasise that ABS GVA does not cover the whole economy and that it does not include all the National Accounting adjustments that reconcile the ABS data with other data sources (especially taxes and subsidies, margins and the 'mixed income' economies).

The Quarterly GDP is the Scottish Government's preferred source for measuring GVA change over time – for the Scottish economy as a whole and for broad sectors of the Scottish economy.

Detailed information of the differences between ABS approximate GVA at 'basic prices' and National Accounts/Regional Accounts GVA is available in Section 9.1 in the ABS Technical Report published by the Office for National Statistics (ONS).

The ONS also published an article in 2014 on A Comparison between Annual Business Survey and National Accounts Measures of Value Added

Business Register and Employment Survey

Employee jobs/employment data, largely sourced from the Business Register and Employment Survey (BRES), are provided in the Scottish Annual Business Statistics (SABS) results. These employment estimates are provided in SABS to enable consistent productivity measures to be calculated.

The employee jobs/ employment estimates in SABS will tend to be lower than those published in BRES since BRES has wider industrial coverage than the Annual Business Survey (ABS) from which SABS is mainly sourced. There will also be differences between the employment estimates in BRES and the employment estimates as published in SABS as a result of differences in the samples selected for each survey.

If employee jobs/employment data by industry only is required (and so not to construct labour productivity measures), then the Business Register and Employment Survey (BRES) is the preferred source for Scotland and local areas within Scotland. 

Businesses in Scotland

Businesses in Scotland (formerly Scottish Corporate Sector Statistics) is another annual business statistics publication, released by the Scottish Government – the source of which is the Inter Departmental Business Register (IDBR).

The main purpose of this publication is to provide information about the number of enterprises operating in Scotland. Like SABS, Businesses in Scotland provides estimates of employment and turnover by industry, local authority area and ownership.

However, the employment and turnover estimates are provided in Businesses in Scotland publication as auxiliary variables that enable users to determine what proportion of employment/turnover generated in the economy can be attributed to businesses of different size. Employment and turnover, as published via Businesses in Scotland, do not relate to a single point in time and can be out of date for some small firms. For this reason, it is not the preferred the source for comparing employment and turnover estimates over time. 

It has been established that the estimation of regional capital expenditure is unreliable, and therefore Net Capital Expenditure figures are not now available on Scottish Annual Business Statistics (SABS) website.

Office for National Statistics (ONS) has provided the following information on this: Figures on regional capital expenditure are no longer made available on the Annual Business Survey (ABS) website pages. Accurate estimation of regional capital expenditure is dependent on there being a strong correlation between the variable on which any estimation is based, in this case local employment, and the variable for which we are attempting to produce estimates, here regional capital expenditure. It has been established that the relationship between regional employment and regional capital expenditure is, in fact, unreliable.

The Annual Business Survey (ABS) questionnaires are addressed to the individual legal unit, i.e. the individual company, partnership, sole proprietorship, etc.

The forms are designed to ensure the burden on the individual contributor has been kept as low as possible. A number of different form-types are used in the survey:

• Long form-types were sent to nearly all businesses with an employment of 250 or more and also to a proportion of selected businesses with lower employment.
• Short form-types were sent to the remaining selected businesses.

On the “long” questionnaire, there is a more detailed breakdown of variables such as turnover, purchases and employment costs, while the “short” questionnaire only requires totals. For example, the “short” questionnaire asks for “total employment costs”, whereas the “long” questionnaire breaks this down into gross wages and salaries, employers’ National Insurance contributions, contributions to pension funds and amounts payable through redundancy and severance.

Example questionnaires (of short and long forms) for Production and Services can be found under Section 3 in the Office for National Statistics background information to the Annual Business Survey (ABS).

Number of Units

This relates to the number of individual business sites e.g. a plant, factory, shop etc.

Total Employment

This is the point in time estimate of full and part time employees on the payroll plus the number of working proprietors employed on a set day in September.

Please see under heading "Total Employees/Employment and Per Head variables" for how this data is supplemented from the Inter-Departmental Business Register (IDBR).

Please note that Total Employment is a head count and not a Full Time Equivalent (FTE) measure. This distinction is particularly important for sectors with high levels of part time employment (e.g. Retail and Accommodation & Food Service activities) especially when comparing Per Head figures.

Total employees

This is the point in time estimate of full and part time employees on the payroll on a set day in September.

Please see under heading "Total Employees/Employment and Per Head variables" for how this data is supplemented from the Inter-Departmental Business Register (IDBR).

This is also a head count and not a Full Time Equivalent (FTE) measure (see employment explanation above).

Total turnover

Turnover is defined as the total value of sales. This is calculated by adding together the values of:

• sales of goods produced
• goods purchased and resold without further processing
• work done and industrial services rendered
• non-industrial services rendered

Purchases of goods & services

This is the value of all goods and services purchased during the year.

Gross Value Added at Basic Prices

Approximate gross value added (aGVA) represents the amount that individual businesses, industries or sectors contribute to the economy.

The estimate of approximate Gross Value Added at basic prices (aGVA) represents the income (Turnover) of businesses, less the cost of goods and services consumed in the production process (Purchases).

Generally, this is measured by the income generated by the business, industry or sector less their intermediate consumption of goods and services used up in order to produce their output, labour costs (for example, wages and salaries) and an operating surplus (or loss). The latter is a good approximation for profits, from which the cost of capital investment, financial charges and the payment of dividends to shareholders are met.

There are differences between the approximate measure of aGVA calculated by Annual Business Survey (ABS) and the measure of gross value added (GVA) used in the national accounts (NA). NA carry out coverage adjustments, conceptual adjustments and coherence adjustments. The NA estimate of GVA uses inputs from a number of surveys and covers the whole UK economy. Some industry sectors are not included in the ABS.

Detailed information of the differences between ABS approximate GVA at 'basic prices' and National Accounts/Regional Accounts GVA is available in Section 9.1 in the ABS Technical Report published by the Office for National Statistics (ONS).

The ONS also published an article in 2014 on A Comparison between Annual Business Survey and National Accounts Measures of Value Added

Total Taxes

These are the amounts payable to the government for taxes, levies and duties. Included are rates relating to industrial and commercial property which are payable to the government via local authorities.

Increase in Total stocks

This represents the increase during the year for materials, stores and fuel and goods on hand for sale. Amounts for materials which have been partially processed but which are not usually sold without further processing are also included.

Gross Wages & Salaries

This represents the amount paid to employees (in cash or kind). This includes gross wages and salaries and redundancy and severance payments to employees. Payment to working proprietors, travelling expenses etc. are excluded.

Total Labour Costs

This represents the total cost to employers of employing staff. This includes all gross wages & salaries (see above), overtime payments, bonuses, commissions, payments in kind, benefits in kind, holiday pay, employer's national insurance contributions, payments into pension funds by employers and redundancy payments less any amounts reimbursed for this purpose from government sources. No deduction is made for income tax or employee's national insurance contributions. Payment to working proprietors, travelling expenses and lodgings allowances are excluded.

Total Output at Basic Prices

Output is essentially the measure of productive activity and covers - market output, output produced for own final use and other non-market output.

Glossary

The ONS have published an Annual Business Survey technical report, providing detailed quality and methodology information. There is also a historic ABS Glossary of terms which may still be of interest to help interpret technical descriptions and abbreviations associated with the Annual Business Survey.

Links to areas within the Scottish Government

Scotland's official statistics

You can access a range of statistics about Scotland and explore the data by theme, organisation, or geography. You can also search for datasets, places or enter your postcode to find data about your local area. The data can be viewed as tables, maps and charts or downloaded in various formats.

Growth Sector Statistics Database

The Growth Sector statistics database provides economic statistics for the growth sectors (also known as key sectors).

Input-Output Tables and Multipliers for Scotland

Input-Output tables provide a complete picture of the flows of goods and services (products) in the economy for a given year. They detail the relationship between producers and consumers and the interdependencies of industries.

Businesses in Scotland

Businesses in Scotland (formerly Scottish Corporate Sector Statistics) provide information on enterprises operating in Scotland. The main purpose of the publication is to provide an estimate of Scotland’s business stock. Within the publication the Scottish business stock is broken down by various dimensions including industry, business size, local authority area, urban/rural area and country of ownership.

Export Statistics Scotland

Export Statistics Scotland produces estimates of the cash value of exports by destination and industry sector for all sectors of the Scottish economy, including the primary, manufacturing and service sectors.

Business Insights and Conditions Survey (BICS) weighted Scotland estimates

The Scottish Government produces weighted Scotland estimates using the Office for National Statistics’ (ONS’) Business Insights and Conditions Survey (BICS). This is for businesses with 10 or more employees. The weighted Scotland estimates are for businesses that have a presence in Scotland, as opposed to only those businesses headquartered in Scotland.

The ONS’ BICS is a voluntary fortnightly business survey, which captures businesses’ responses on how their turnover, workforce, prices, trade and business resilience have been affected by current conditions.

Links to websites outside the Scottish Government

UK and Regional Annual Business Survey

Statistics for the UK, English Government Office Regions, Scotland, Wales and Northern Ireland are produced by the Office for National Statistics (ONS). However, please note that due to the 2019 estimation process used for Scottish Annual Business Statistics (SABS) estimate for 2019, our estimates for Scotland for 2019 do not always match those published by the ONS.

Regional Annual Business Survey

Regional results up to 2016 provisional (data for 2016 has since been revised) were produced by the ONS

UK Annual Business Survey

National results up to 2017 provisional (data for 2017 has since been revised) were produced by the ONS

UK and Regional Annual Business Inquiry

Historic National and Regional results up to 2008 were produced by the ONS

Business Register and Employment Survey (BRES)

Business Register and Employment Survey (BRES) data and sampling errors are produced by the Office for National Statistics at a UK and regional level.

Please see heading Total Employees/Employment and Per Head variables for information on how BRES is used in Scottish Annual Business Statistics (SABS) publication.

Secure Research Service (SRS) / Integrated Data Service (IDS)

The Office for National Statistics (ONS) Secure Research Service (SRS) is a Trusted Research Environment (TRE). It gives accredited or approved researchers secure access to a wealth of de-identified, unpublished data to work on research projects for the public good.

The Integrated Data Service (IDS) is a new and upcoming cross-government service that aims to build on the success of the Secure Research Service (SRS). The IDS will create a central hub of high quality, accessible data - critical for driving efficiency and improving public services.

UK Data Service​​
​​​​​The UK Data Service has trusted access and training to use the UK's largest collection of economic, social and population data for research and teaching. It assists researchers, students and teachers from all sectors, including academia, central and local government, charities and foundations, independent research centres, think tanks, and business consultants and the commercial sector. The UK Data Service collection includes major UK government-sponsored surveys, cross-national surveys, longitudinal studies, UK census data, international aggregate, business data, and qualitative data.

The United Kingdom Statistics Authority has designated these statistics as National Statistics, in accordance with the Statistics and Registration Service Act 2007. This provides assurance that these statistics are of the highest quality and meet user needs, and that they comply with the Code of Practice for Statistics.

Further information on National Statistics is published by the UK Statistics Authority.

These statistics last underwent a full assessment against the Code of Practice in 2012. Details of the assessment are available at: Assessment Report 189 - Statistics on Scottish Businesses and Research and Development (96.4 Kb, Pdf document)

Since the last assessment, we have continued to comply with the Code of Practice for Statistics and have made improvements to the statistical release - for example by providing more detailed breakdowns and improving accessibility.

We are always interested to hear from our users about how our statistics are used, and how they can be improved.

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Enquiries

For enquiries about this publication please contact:

Marina Curran

Business & Innovation Statistics

Office of the Chief Economic Adviser

e-mail: industrystatistics@gov.scot
 

For general enquiries about Scottish Government statistics please contact:

Office of the Chief Statistician

e-mail: statistics.enquiries@gov.scot