Orkney Economic Review 2010

Development and Environment Services
Orkney Islands Council, School Place, Kirkwall, KW15 1NY
www.orkney.gov.uk

No. 24

IMAGE: The cover shows the title “Orkney Economic Review 2010”, the Orkney Islands Council crest, “No. 24”, the council address and website, and two wind turbines standing on a landscape beneath a cloudy sky.

IMAGE: Map of the Orkney Islands, labelling Mainland, Hoy, Flotta, Graemsay, South Ronaldsay, Burray, Shapinsay, Rousay, Wyre, Egilsay, Eday, Stronsay, Sanday, Westray, Papa Westray and North Ronaldsay.

Contents

1. Labour Market
2. Economic Activity
3. Population
4. Weather
5. Agriculture
6. Fishing
7. Fish Farming
8. Energy Production
9. Transport
10. Tourism
11. Housing

IMAGE: Photograph of Kirkwall Marina at dusk, showing boats and masts on calm water beneath a cloudy, fading sky.

1 Labour Market

Unemployment Rate % in Orkney 2003–2009

Source: Office for National Statistics (ONS)

Note: Unemployment rates are all people claiming unemployment related benefits, divided by the number of economically active people (the proportion of the population which is involved in employment, self-employment or is seeking full-time work, ONS).

Orkney’s average unemployment rate in 2009 rose slightly. The increase in claimants between 2008 and 2009 could perhaps be attributed, in part, to the closure of the Kirkwall Woolworths store in December 2008 and a drop in activity within the construction sector during this period. However, as the following table illustrates, the recent trend is towards increasing numbers of job seekers and for increasingly lengthy periods of unemployment.

IMAGE: The page contains a photograph of an Orkney coastal settlement across a stretch of water.

Claimant count, Job Seeker Allowance

Source: Office for National Statistics (ONS)

Notes: Totals may not always tally due to rounding and, owing to rounding, the apparent movements by age group and duration may be exaggerated. Historically, unemployment generally tends be at its lowest during the summer months.

The age bracket displaying the largest increase (in percentage terms) in Orkney unemployment during the last two years is the 18-24 age-group and this is perhaps symptomatic of declining investment by businesses in general and, in particular, a reluctance or inability to invest in trainees and apprentices.

However, the overall rate of increase over the last two years, in percentage terms, is less than half that in Scotland or in Great Britain (GB).

JSA Claimants

Source: ONS

Note: Claimant % is a proportion of resident working age people (estimated).

This is a consistent position and the following chart illustrates the relative health of the Orkney labour market over the past five years.

Unemployment Rate in Orkney Relative to Scotland 2003–2009

The chart compares Scotland and Orkney unemployment rates from June 2003 to December 2009. Scotland is higher than Orkney throughout the period, with Scotland reaching approximately 4.2% in December 2009 and Orkney approximately 1.4%.

Source: Office for National Statistics

Unemployment in Orkney can be further broken down by electoral wards, illustrating the differences that can occur in Orkney, both across the Mainland and between islands. The following table shows however that even the highest rate of unemployment in Orkney is lower than the Scottish average.

Orkney Job seekers at September 2009

Source: Scottish Government Analytical Services Division

% of all economically active

The number and percentages of job seekers in Orkney’s wards can change significantly from month to month. The above table is only indicative of the situation at September 2009.

2 Economic Activity

The percentage of the Orkney population who are economically active, i.e either in employment or actively seeking employment, tends to be higher than both the Scottish and Great Britain averages.

Economically Active as % of (estimated) working age population

Source: ONS

Self-employment is more prevalent in Orkney than in the rest of Great Britain.

Self-employment – regional comparison

Source: ONS

A relatively higher percentage of the Orkney employee jobs are also part-time in nature and this is likely to result in lower than average household incomes.

Distribution of employee jobs, 2008

Source: ONS annual business inquiry employee analysis (employee jobs rounded to nearest 100)

*Tourism consists of industries that are also part of the services industry.

Compared to Great Britain as a whole, employment in construction was much more significant in Orkney during 2008, whereas manufacturing was a much less prominent industry. Unsurprisingly, in respect of in an island community, employment in the transport and communications sector and in public administration, education and health, is also much more significant in Orkney. Orkney’s geography and dis-economies of scale also create fewer local opportunities in finance, IT and other business activities.

Data on the numbers of all businesses registering or deregistering for VAT is no longer available for dates after 2007. This has been replaced with a table of business births and deaths, but only in respect of what is termed ‘Active Enterprises’ i.e. those registered either for VAT and/or PAYE. The data therefore does not include the many small businesses in Orkney who are not employers.

Active Enterprises – Orkney

Source: Scottish Government Analytical Services

The 800 active enterprises consisted of the following businesses, categorised by the number of persons employed by each.

Orkney business stock by scale

Owing to the very small number of Orkney businesses sampled by them, the reporting of productivity (or Gross Value Added [GVA]) by government statistics agencies has traditionally been unreliable. Nevertheless, an indication of GVA in three of the industrial sectors is provided in the following table and compared to Scotland as a whole. The 2007 data is the most recent available.

Gross Value Added, at basic prices, by Industry in years 1998, 2006 & 2007

• Services here excludes: Financial Intermediation, Public Administration and Health & Social Work

Source: Scottish Government Analytical Services

• Construction: Between 1998 and 2007, total GVA and GVA per employee increased substantially in both Orkney and Scotland with output per employee in Orkney slightly higher than the Scottish average.
• Manufacturing: Considering all other data, it would appear that the 1998 GVA figures could have been wrongly reported. However, following an apparent increase in output in Orkney between 2006 and 2007, output per employee, again, is higher than average.
• Services: Orkney’s service sector appears to have consistently under-performed against the Scottish average with productivity actually falling in Orkney between 2006 and 2007. Service sector output is however very difficult to measure and can be particularly unreliable in respect of small sample numbers.

Earnings

Because of the small number of Orkney employees sampled, data published by national statistic agencies in respect of average Orkney weekly earnings is unreliable and is not reported here.

IMAGE: Photograph of British pound banknotes and coins, illustrating earnings and monetary values.

3 Population

Although Orkney’s population natural growth rate (births minus deaths) was still negative in both 2008 and 2009, the gap was smaller than it has typically been for many years, with registered births at its highest level for some years. Estimated in-migration was however much lower than during recent years and this might have been assumed to be influenced by the difficult conditions prevailing in the UK economy and housing market.

Orkney Population Change

Source: General Register Office for Scotland (GROS)

NOTE: population and migration figures post 2001 census are estimates.

The estimated 2009 population is slightly lower than that predicted by GROS in 2007, predictions which were based upon the estimated population figure in respect of 2006. The Orkney population is now predicted to reach 21,501 in 2023.

IMAGE: Photograph of passengers travelling on a small ferry, showing a crowded open deck and the surrounding coastal landscape.

Predicted population changes (per cent) 2008 to 2023

• Pensionable age is 65 for men, 60 for women until 2010; between 2010 and 2020 pensionable age for women increases to 65.

Source: GROS

An Orkney Population and Migration study was completed in April 2009 and the comprehensive report can be viewed at:

http://www.orkney.gov.uk/nqcontent.cfm?a_id=14382&tt=orkneyv2

IMAGE: Photograph of a large crowd walking through a narrow Orkney street, illustrating the local population and visitor activity.

4 Weather

Temperature

Sources: 2009 data: Loch of Hundland climate station
10 year average, period 2000–2009: Loch of Hundland climate station
50 year average: Kirkwall Airport data 1950–2000

The comparisons are more clearly illustrated in the following chart.

IMAGE: Line chart comparing mean maximum and minimum temperatures in 2009, over the ten-year average and over the fifty-year average for each month from January to December. Maximum temperatures peak in July and minimum temperatures peak in July or August.

As data from the Meteorological Office (taken at Kirkwall Airport) is now less readily available, weather statistics for 2009 and the 10-year averages are provided from the Loch of Hundland climate station, privately operated by Keith Johnson. Comparison of the ten and fifty year averages shows a fairly consistent increase in the mean monthly maximum temperatures throughout the year. The chart also reflects the higher than average temperatures experienced in 2009 during the spring and summer period. There is less evidence of a consistent trend in the average minimum temperatures although it is clear that the April to September period has been consistently milder over the past ten years than it was over the preceding fifty-year period.

This overall trend is in line with the well-documented concept of global warming, although it should be noted that this data is not conclusive and any apparent pattern may just be the result of natural cyclical change or of differences between the prevailing weather at the two locations.

Rainfall & sunshine hours

Source: 2009 data: Loch of Hundland climate station
10 year average, period 2000–2009: Loch of Hundland climate station
50 year average: Kirkwall Airport data 1950–2000

Rainfall and sunshine pattern

IMAGE: Line chart comparing monthly rainfall and sunshine hours in 2009 with ten-year and fifty-year averages. It shows substantial monthly variation, with the highest sunshine in May and June and the highest rainfall in October and November.

In total, 2009 was wetter but sunnier than average although 2009 monthly variations in both rainfall and sunshine demonstrate little or no consistency against either the ten or fifty-year averages.

Perhaps a better indication of weather pattern is found by comparing total rainfall and sunshine experienced during the last ten years with those of the preceding fifty years. From the table, it is clear that Orkney’s weather is becoming wetter, with average rainfall some 3.8% higher. The hours of sunshine are however also increasing – the last ten years averaged 97 hours (or 8.4%) higher than the 50-year average.

Again this may be partly due to differences between the prevailing weather at the two locations.

5 Agriculture

Livestock values returned at Orkney Auction Mart rose during 2009 to unprecedented levels, perhaps as a consequence of falling livestock numbers both in Orkney and across Scotland generally. Prices remained at high levels until the end of 2009 and into early 2010.

Orkney Auction Mart Prices – Average price, pence per kg

Source: Orkney Auction Mart

Although livestock shipments through Orkney Islands Council (OIC) ports increased significantly in 2008, this may have been due in part to disruption of the privately-run St Margaret’s Hope – Gills Bay ferry service during peak periods. As data for that service, which commenced May 2001, is not available, total livestock shipments from Orkney can no longer be ascertained.

Livestock Shipments from Orkney (OIC Ports)

Source: OIC Marine Services

IMAGE: Photograph of a tractor working in a field, with birds flying over the grass.

Agricultural Land Use in Orkney (hectares)

Source: Scottish Government’s Rural and Environment Research and Analysis Directorate (RERAD)

Note: Totals may not always tally due to changes in reporting methods.

• Not reported in census.

Land Use: Although it appears that, following a slight increase in 2008, the total land area utilised by agriculture decreased significantly in 2009, the statistics agency believes that this may be an anomaly caused by changes to data collection and reporting processes.

Livestock numbers in all categories continued to fall during 2008. Although beef cattle numbers also fell in 2009, the dairy sector displayed signs of recovery and sheep numbers appear to have stabilised. It is to be hoped that the increase in prices achieved recently in beef and lamb, perhaps as a result of less intensive farming and decreasing livestock numbers across Scotland, will lead to a reversal of the recent downward trends.

Herd/Flock Size in Orkney

Source: RERAD, agricultural census annually at June

Despite evidence of a declining dairy herd, milk production increased once more during 2007-2008 and 2008-2009 and is now higher than it has been for a number of years. It is suggested that the introduction of new stock management processes has resulted in increased yields.

IMAGE: Bar chart showing Orkney milk production, in thousands of litres, rising overall from 2001–02 to 2008–09, with a small fall in 2004–05 and 2006–07.

Because in excess of 85% of all Orkney milk production goes towards the manufacturing of Orkney cheese, the price paid to the farmer for liquid milk varies from year to year, and throughout the year, depending on the prevailing market prices. The average price per litre during recent years is set out below.

Liquid milk: Average price per litre paid to Orkney milk producers

Source: Orkney Cheese Company Ltd

Total employment in agriculture has stabilised during the past year and, with a total of 1,971 people having a direct economic interest in farming, the agriculture industry remains the most significant employer in Orkney outwith the public sector.

The total number of agricultural holdings has continued its upward trend and this, along with other evident trends, reinforces the belief that the apparent drop in agricultural land is due to changes in statistical procedures, and that the land area associated with agriculture in Orkney remains relatively constant.

Agricultural Employment in Orkney

Source: RERAD, Agricultural Census, June 2009

CAP Subsidies: The total of all subsidy payments received by Orkney farmers during recent years under the EU Common Agricultural Policy support schemes is set out in the following table. Fluctuations may be due, in part, to currency exchange rate movements and changes in eligibility for dedicated schemes.

CAP Subsidies

Source: Scottish Government Rural Payments and Inspections Directorate

At just under £20 million last year, subsidies are critical to the viability of Orkney farming and the future success of Orkney agriculture may be dependent upon the continued entitlement to these payments.

IMAGE: Photograph of agricultural machinery harvesting or cutting a field, with tractors, trailers and birds visible.

6 Fishing

Orkney Fishing Fleet

Source: RERAD

2009 data was not available at the time of printing. The number of trawlers registered in Orkney dropped to a low of 6 in 2008 but crab and lobster vessel numbers remain relatively stable and prawn vessels appear to have increased substantially.

Orkney Fishermen Employed

Source: RERAD

It would appear that employment in the fishing industry declined steeply during 2008. However, it seems more likely that there has been an anomaly in the data reported in respect of 2007. Nevertheless, total employment in the sector has declined slightly since 2006, although the number employed on a regular basis appears to have held up well.

IMAGE: Photograph of Orkney coastline, with dark blue sea and rocky cliffs extending into the distance.

Landings of White fish by Orkney Vessels

• figure not available

Source: Scottish Sea Fisheries Statistics

Although there were fewer trawlers operating during 2008, the value of fish landed by white fish vessels increased by 45% before falling back slightly again in 2009.

Landings of Shellfish into Orkney ports

Source: 2004–2008 – Scottish Sea Fisheries Statistics
2009 – Orkney Fisheries Association

Since 2006, both the weight and value of shellfish landed in Orkney has remained fairly constant. In addition, an unspecified and significant quantity of shellfish is landed at other Scottish ports by vessels registered in, and operating from, Orkney.

7 Fish Farming

Salmon & Smolt Production in Orkney

Source: Marine Scotland Science

• projected figures

Unconfirmed data (2009) suggests that the production of farmed salmon continues to rise from its 2006 low and, apart from the exceptional level in 2003, is now as high as it has been since 1998. Smolt production increased to a four-year high in 2008 before declining again last year and production is now well below what it was during its peak in 2003.

The increased production of farmed salmon appears to have resulted in a disproportionate increase in full-time employment in the industry during 2008.

IMAGE: Photograph of a fish-farming site in a coastal loch, with floating pens visible across the water.

Fish Farming Employment in Orkney

Source: Marine Scotland Science

Shellfish Production: Marine Scotland reports show that there were 12 registered sites in Orkney in 2008 with total employment in the sector of 7 part-time. However, only 1 site was producing shellfish directly for the consumers’ table.

IMAGE: Photograph of shellfish arranged on ice, including a lobster, prawns, mussels, clams and oysters.

8 Energy Production

Oil & Gas

The volume of crude oil leaving the Flotta Oil Terminal remained relatively constant during the 2006–2008 period but declined again last year by almost 10%. Foinaven oil is no longer shipped via the Flotta terminal.

Annual Tonnages of Cargoes Loaded from the Flotta Oil Terminal

Source: OIC Marine Services

The number of ship-to-ship (STS) transfers in Scapa Flow increased to an all-time high during 2009, with the volume of oil transported almost matching the high achieved in 2004.

STS transfers and Oil tonnage

Source: OIC Marine Services

Wind Energy

The number of operational wind turbines in Orkney continues to grow with 15 turbines generating up to 25.9 megawatts (MW) by the end of 2009. Planning consent for an additional 17 turbines generating up to 21.3MW has been approved but the projects were either still under construction in 2009 or had not yet commenced construction.

IMAGE: Photograph looking upward at a large wind turbine against a cloudy sky.

Operational Grid Connected Wind Turbines in Orkney, 2009

Source: Energy4All

Marine Energy

In March 2010 The Crown Estate announced the names of the successful bidders for the lease of commercial wave and tidal generation sites in the Pentland Firth and Orkney waters. Seabed leases were awarded to developers to install 1050MW of marine generated power at eight sites in Orkney waters with a further 150MW at two sites on the northern coastline of the Scottish mainland. A substantial increase in investment and activity in the sector is anticipated during the next twelve months and beyond.

The following map illustrates the marine areas within which the commercial generation will be contained. The shaded areas highlight only the site boundaries, not the scale of any potential development – i.e. only a proportion of each area would be populated by devices.

IMAGE: Map titled “Pentland Firth and Orkney Waters Round 1 Development Sites”, dated 05 March 2010, showing tidal and wave development sites, strategic areas, the United Kingdom and Europe. It marks sites at Costa Head, Westray South, Brough Head, Marwick Head, West Orkney Middle South, West Orkney South, Cantick Head, Brough Ness, Ness of Duncansby and Armadale, with capacities from 50 MW to 200 MW. The map credits The Crown Estate and includes a table of site names and tenant owners.

Another energy ‘first’ was achieved in Orkney during 2009 when the world’s only hydro-electric wave energy device was switched on at the European Marine Energy Centre’s Billia Croo wave test site, near Stromness, feeding electricity into the National Grid.

9 Transport

Traffic on Stromness – Scrabster Route (NorthLink Ferries)

Source: OIC Marine Services

The upward trend in passenger and accompanied car numbers on the Stromness-Scrabster route since 2002 was halted in 2008, passenger numbers falling over the year by 7% and cars by 3%. However, a recovery in 2009 saw both services increasing traffic again. The number of commercial vehicles and trailers using the service continues to rise following four years of decline between 2003 and 2007.

In 2008, all traffic declined on the Lerwick – Kirkwall – Aberdeen route but passenger and car numbers increased again during 2009. Although the number of commercial vehicles declined again in 2009, cargos increased substantially.

Traffic on Shetland – Kirkwall – Aberdeen Route (NorthLink Ferries)

Source: OIC Marine Services

Although numbers are not published, it has been reported by Pentland Ferries that passengers and car traffic on the St. Margaret’s Hope – Gills Bay route increased by 18 per cent in 2009, compared with the previous year. This increase may have been due in part to the introduction of a new faster vessel on the route during 2009.

Combined passengers and car traffic on all routes therefore increased significantly in 2009.

IMAGE: Photograph of a red-and-white passenger ferry moored beside another vessel in a harbour.

Kirkwall Airport Traffic

Source: Highlands and Islands Airports Limited, Annual Reports

Total passenger numbers and aircraft movements continue to increase, perhaps as a consequence of the continuing and increasing influence of the Air Discount Scheme (ADS) and of increased services, but also, as recently reported by Loganair (operators of FlyBe services),an increase in business travel related to the marine energy industry. Although no breakdown was available at the date of publication, HIAL has advised that total 2009/10 passenger numbers at Kirkwall have increased again to 153,256.

Orkney’s Internal Ferry Routes

Passengers: Single journeys – year ended March

Vehicles

The total levels of passenger and vehicle traffic both remain high on the internal ferry routes with the majority of islands displaying growth. The most notable exceptions to the general trend are the passenger numbers on the Papay and the Rousay/Egilsay/Wyre services (-22% and -7%, respectively, down on the previous year).

IMAGE: Map of Orkney’s internal ferry routes, showing dashed ferry connections between the islands and Mainland. Insets show the MV Earl Thorfinn returning to Kirkwall and the MV Graemsay in Stromness Harbour.

10 Tourism

IMAGE: Photograph of the Standing Stones of Stenness at sunset, with two visitors silhouetted beside one of the stones. The caption reads “Standing Stones of Stenness”.

This edition of the Economic Review coincides with the publication of the Orkney Visitor Survey 2008/09, conducted by AB Associates Limited over the period October 2008 – September 2009, on behalf of Orkney Islands Council, Highlands and Islands Enterprise and VisitOrkney. The full report on the survey findings can be viewed at: http://www.orkney.gov.uk/nqcontent.cfm?a_id=15244&tt=orkneyv2

The Orkney visitor survey has been conducted at regular intervals over recent years with previous surveys carried out seasonally in 1996 and 2000, and more recently over a twelve month period during 2004/05.

Some of the headline statistics from the report are reported below.

Total Travel Oct 08 – Sep 09 by Transport Route – Exit Survey

From the table above it can be seen that a total of 227,877 travellers exited Orkney over the period. 86,705 or 38% of these were residents and 141,172 or 62% were visitors. This shows an increase of 20,646 visitors or 17% from the 120,526 recorded in the 2005 survey. In terms of the proportionate breakdown by transport provider, visitors represented 43% of travellers exiting via NorthLink Ferries, 49% at Kirkwall Airport and 81% on other ferry operators.

Visitor Travel – Breakdown by Transport Route

The figures above show a proportionate fall in visitor travel of 4% by air and 3% for NorthLink Ferries, with no proportionate change for other ferry operators. In numerical terms there have been significant rises in both visitor air travel, up 10,045 or 45%, and travel on other ferry operators, up 12,429 or 31%, coupled with a small decrease of 1,828 or 3% in visitor travel via NorthLink Ferries.

Direct comparisons cannot be made with other island areas owing to the difference between survey dates but the following table does indicate that Orkney attracts many more visitors than Shetland but fewer than the Western Isles.

Total Visitor Numbers Comparison to Other Areas

However, a much higher percentage of visitors to Orkney are tourists as can be seen from the next table.

Main Purpose of Trip Comparison to Other Areas

With fewer business tourists, who often travel alone, the average size of the visiting party to Orkney is, perhaps unsurprisingly, slightly larger than that to the other island groups.

Average Party Size Comparison to Other Areas

Since 2005, Orkney tourism has become more dependent on the home market with an increasing percentage of our visitors originating from elsewhere in Scotland.

Area of Origin All Visitors & 2005 Comparison

In line with the general trend towards more frequent but shorter holidays, the average length of a visit to Orkney has decreased substantially since 2005 with Orkney mainland stays being hit hardest.

Average Length of Stay in Orkney Sub-Area – Compare (Nights)

The total spent by the average visitor has increased slightly over the past four years. However, when inflation is taken into account, the average spend per person has fallen by just under 4%, which is not surprising given the drop in the average length of stay.

Average Spend Per Person Per Trip (£)

A further breakdown of the figures in respect of spending on food & drink and on ‘souvenir’ shopping shows estimated spend on local produce as indicated in the following table:

Average Spend on Local Produce Per Person Per Trip (£)

The variance in spend patterns from one type of visitor to another is further highlighted below.

Average Spend & Other Key Indicators by Visitor Type 2009

• VFR – Visiting Friends or Relations

The following three tables demonstrate the increasing role of the internet in Orkney tourism.

Method of booking accommodation

From the table above, it can be seen that, in 2009, the most common method of booking accommodation was via internet, with almost 80% more visitors using that method than in 2005. The drop in bookings made directly with the accommodation provider can be explained by the increased use of the internet. The number of visitors booking accommodation via Tourist Information Centres (TICs) has dropped by 63% since the last visitor survey.

Information Sources Used Prior to Arrival Overall, by Origin & Trip Purpose% – 2009

The most frequently used information source overall was the internet, with 70% stating they had used it to find out about Orkney prior to visiting. Visitors also used the internet for a range of activities related to their visit, both as a research tool and in order to purchase services and some of these are set out below.

Internet Research and Booking %

In general, tourists coming to Orkney during the 2008/09 period expressed satisfaction with their visitor experience with 95% stating that either their expectations had been met or exceeded with none stating that their expectations had not been met.

Visit

This general level of satisfaction is reflected by the likelihood of a return visit within the next five years by approximately three quarters of all visitors, in line with the findings of the previous survey also.

Likely to Return Within 5 Years 2005 Comparison %

Value of Tourism Growth

In order to measure the growth of Orkney tourism in real terms, the following table shows how the 2008-09 figure compares to the inflation adjusted figures reported in respect of previous surveys.

Inflation-adjusted value comparison

From the table above it can be seen that when overall spend figures for the previous surveys are inflated to 2009 levels, real growth in visitor spend of £3.7m (13%) has occurred since 2005; £12.1m (62%) since 2000; and £13.6m (75%) since 1996.

IMAGE: Photograph of a marina crowded with sailing boats and masts.

Cruise Liner Tourism

Cruise Liner Visits to Orkney

Source: OIC Marine Services

2008 saw a 9% increase in the number of cruise ships calling at Orkney ports but the increase in passenger numbers was negligible. In 2009, the number of visiting ships fell by twelve (16%) and passenger numbers fell by more than 2,000. There are however indications that both vessel and passenger numbers will increase again for the 2010 season.

IMAGE: Photograph of a large white cruise liner offshore, with a rusted piece of industrial machinery in the foreground.

11 Housing

During the fourth quarter of 2009, house prices in Orkney fell slightly from the corresponding figure twelve months earlier. The fall was in contrast to a slight increase in the Highland area and in Scotland generally, but was much lower than the fall in the other two island Local Authority areas. Although prices in the other two island areas, already lower than in Orkney, also fell on the previous quarter in 2009, the Orkney market displayed signs of recovery.

Average Residential Property Prices – Source: Registers of Scotland

In terms of the numbers of sales completed over the same period (below) the property market in Orkney has remained much less lethargic than in the other two comparable island areas, although it has been much less dynamic than on the Scottish mainland.

Number of Residential Sales – Source: Registers of Scotland

In 2008, house completions in Orkney dropped back from their peak the previous year but, despite the challenging economic climate, increased again during 2009.

A total of 919 new houses, or approximately 10% of the total Orkney housing stock, have now been completed during the past seven years, with the number of private developments almost double that of the social housing agencies.

Following several years during which Orkney Islands Council was building no new houses at all, the Council has resumed building in 2010 and will complete 125 new Council houses over the next three years.

Housing Completions in Orkney

Sources: Scottish Government (2002–2007); OIC (2008–2009)