Orkney Economic Review 2018

Photos supplied by Andrew Learmonth and Colin Keldie.

IMAGE: The cover displays the Orkney Islands Council crest above the title “Orkney Economic Review 2018”, with six photographs showing craftwork, Orkney grain and flour, a fishing boat, an archaeological site, the Flotta oil terminal and cattle. The cover states: “Photos supplied by Andrew Learmonth and Colin Keldie.”

This document aims to bring together and review the latest data available on the Orkney economy and statistics and information which might influence the economy. The majority of the statistics come from published sources, which are credited below each table.

Whilst it is the purpose to present up-to-date information, in a few cases, where current data was not available at the time of publication, more dated figures are shown.

Every care has been taken in the completion of this review. However, the publisher cannot accept responsibility for any errors or omissions. It should be noted that small local sample sizes can lead to some rounding of figures, and that some figures previously published in this review have been revised in light of the availability of updated statistics and research.

If you have any suggestions for subject areas which could be included in future Orkney Economic Reviews, please forward them to: economic.development@orkney.gov.uk.

Please note: The Western Isles are referred to throughout as ‘Eilean Siar’.

Contents

1. Weather
   • Climate Statistics
2. Population
   • General Population
   • Births, Deaths and Migration
   • Households and Dwellings
   • Orkney Area Profile and Kirkwall Profile 2014
3. Economic Activity
   • Workforce Qualifications
   • Household income
4. Labour Market
5. Agriculture
   • Herd / Flock
   • Milk production
   • Livestock Shipments
   • Land Use
   • Employment in Agriculture
   • Common Agricultural Policy (CAP) Subsidies
6. Fishing
   • Orkney Fishing Fleet
   • Pelagic / demersal landings by Orkney vessels
   • Employment
7. Shellfish
8. Fish Farming
   • Production
   • Employment
9. Energy
   • Oil and Gas
   • Ship to Ship Transfers
   • Accommodation Rigs
   • Renewable Generation
   • Wind Energy
10. Transport
    • Stromness to Scrabster Route (Northlink Ferries)
    • Shetland to Kirkwall to Aberdeen Route (Northlink Ferries)
    • Kirkwall Airport Traffic
    • Orkney’s Internal Ferry Routes
11. Housing
12. Tourism

Orkney Internal Transport

An internal ferry service operates to the following islands of Orkney:

• North Ronaldsay.
• Papa Westray.
• Westray.
• Sanday.
• Eday.
• Stronsay.
• Rousay.
• Egilsay.
• Wyre.
• Shapinsay.
• Hoy.
• Flotta.
• Graemsay.

For more information contact: http://www.orkneyferries.co.uk/.

The following Orkney Islands can also be reached by plane from Kirkwall Airport:

• North Ronaldsay.
• Papa Westray.
• Westray.
• Sanday.
• Eday.
• Stronsay.

For more information contact: https://www.loganair.co.uk/.

UK Mainland Transport

Air Travel

Loganair operate a flight service from Orkney to various Scottish airports and onward to other UK and International airports:

• Kirkwall to Edinburgh.
• Kirkwall to Glasgow.
• Kirkwall to Aberdeen.
• Kirkwall to Inverness.
• Kirkwall to Shetland.

For more information contact: https://www.loganair.co.uk/

Sea Travel

There are three harbours in Orkney from which the mainland ferry services operate:

• Stromness (Stromness Pier).
• Kirkwall (Hatston Pier).
• St Margaret’s Hope.

Northlink Ferries operate the ferry service between Scrabster (Thurso) to Stromness Pier (Stromness) and between Aberdeen, Kirkwall and Shetland. Pentland Ferries operate the ferry service between Gills Bay and St Margaret’s Hope. There is also a ferry service between John O’ Groats and Burwick for foot passengers, which operates in summer only.

For more information contact: https://www.northlinkferries.co.uk/, https://www.pentlandferries.co.uk/ and http://www.jogferry.co.uk/Home.aspx.

IMAGE: A map titled “UK Mainland Transport” marks Orkney Islands, Kirkwall Airport, Stromness, St Margaret’s Hope, Burwick, Scrabster, Gills Bay, John O’ Groats, Inverness, Aberdeen and routes to Edinburgh and Glasgow. A legend distinguishes ferries and flights.

1. Weather

As an archipelago so dependent on economic activity related to agriculture, fishing and tourism, the weather in Orkney can be very influential both in terms of productivity and reputation.

Orkney’s climate is heavily influenced by the sea, in particular the Gulf Stream and is a marine west coast climate which is mild and cool with no dry season and warm summers. Mild winters can occur which by nature bring on heavy precipitation.

Climate Statistics

As data from the Meteorological Office (taken at Kirkwall Airport) is no longer available, 2018 data and the year averages are provided from the Loch of Hundland climate station, privately operated by Mr Keith Johnson.

Temperature

Sources: Loch of Hundland climate station and Kirkwall Airport data.

The early summer months of 2018 was generally warmer than previous averages, with November and December also witnessing higher than average temperatures. However, January – March were noticeable cooler than the 18-year average.

Rainfall and sunshine hours

Sources: Loch of Hundland climate station and Kirkwall Airport data.

Rainfall (mm)

The average rainfall levels in 2018 were lower than the 18 and 51-year averages. There was higher than average rainfall in January, March, September and October.

Sunshine (Hours)

The overall sun hours for 2018 were higher the 18 and 51-year averages. Despite this, January, March, May, October and December all witnessed lower than average hours.

Wind speed

Sources: Loch of Hundland climate station.

Wind is a key feature of the climate. In summer there are almost constant breezes and winter there are frequent strong winds. The average wind speed for 2018 was slightly higher than the 18-year average with September – December experiencing higher than average wind speed.

2. Population

General Population

The National Records of Scotland estimates Orkney’s population in mid-2018 as 22190. This is an increase of 0.86% from the mid-year estimate in 2017. Orkney’s population accounts for 0.41% of the total population of Scotland.

Estimated population of Orkney, by age group in 2018

In Orkney, 16.0% of the population are aged 0 to 15 years. This is lower than Scotland where 16.9% are aged 0 to 15 years. Persons aged 65 and over make up 23.6% of Orkney’s population, higher than Scotland where 18.9 % are in this age group.

Births, Deaths and Migration

In 2018, Orkney witnessed 168 births, just 2 more the figure for 2017.

The number of deaths in Orkney decreased by 50 to 226 in 2018.

In 2018, Orkney’s population natural growth rate (births minus deaths) remained negative, but a significant reduction on the 2017 figure.

The level of estimated net migration in Orkney during 2018 was 250, representing the highest figure in recent years. Only 2004 figures of 247 have come close to the 2018 estimated figure.

Orkney population change 2000 – 2017

Sources: National Records of Scotland/ Vital Events/ Births Time Series Data/ Table BT 4 and National Records of Scotland factsheet.

Note: Population and migration figures post 2001 Census are estimates. Figures for 2000 to 2008 are ‘as at’ 30 June. Figures for 2010 and 2012 are based on the calendar year. Only biennial figures are shown during that period, so the trends do not tally with the changes in population.

Population information for Scotland’s islands from the 2011 Census was released during August 2013 and is detailed in the table below.

Orkney demographic change

The 2011 Census identified changes to the Orkney demographic, as shown in the table below.

These trends can be compared with those for Scotland as a whole.

Projected percentage change in population 2016 – 2026 by age group

IMAGE: A bar chart titled “Age Groups - projected change (2016-2026)” shows projected changes of -5.00% for ages 0 to 15, -7.50% for ages 16 to 24, -2.00% for ages 25 to 44, -7.40% for ages 45 to 64, 5.20% for ages 65 to 74 and 40.40% for ages 75 and over.

Sources: National Records of Scotland. It is predicted the population of Orkney will increase to 22,434 by 2026, an increase of 1.1% on the projected figure for 2018.

Over the 10-year period the trend is towards an increasingly ageing population in Orkney, with the age group 65 and over projected to show by far the greatest increase.

The population of the younger age groups is projected to decline over the same period.

Projections are largely based on past trends and although they will reflect past policy and economic impacts, they do not take into account future changes that may occur as a result of policy initiatives at a local or national level. They also do not take into account of any future effects due to the recent vote for the UK to leave the European Union.

Households and Dwellings

National Records of Scotland reports that the estimate of the number of households in Orkney in 2018 was 10506. This is a 1.2% increase in the 2017 figure of 10385. Since 2001, there has been a 26% increase in the number of households in Orkney. This is the highest percentage change out of the 32 council areas in Scotland.

With regard to Council Tax, band B was the most common in 2017 (25.8%) followed by band A (21.8%). This ranking represents the same as the Scottish average.

Household Projections

The total number of households in Orkney is projected to change from 10042 in 2014 to 10777 at 2024, an increase of 7.3%. Within that number, the number of lone adult households is projected to increase by 15.9%, and the number of larger households in Orkney is projected to fall, with the number of households of 2 or more adults with children decreasing by 11.3% over the 10-year period.

Households headed by 90 and over age group re projected to more than double in number between years 2014 and 2024.

Orkney Area Profile and Kirkwall Profile 2014

Highlands and Islands Enterprise (HIE) has produced a suite of Area and Settlement profiles including for both Orkney and Kirkwall.

HIE have utilised demographic data from the Census, augmented with other secondary sources to help understand the workings of the regional economy of the Highlands and Islands and its constituent local economies.

The Orkney and Kirkwall profiles both use the 2011 Census data to present an up-to-date analysis of its population and labour market. To help contextualise the 2011 findings, the area profile includes corresponding figures were available for the Highlands and Islands area and Scotland as a whole, and the 2001 Census, to show how Orkney has changed over the last 10 years.

The document can be found at https://www.hie.co.uk/research-and-reports/our-reports/2014/june/18/area-and-settlement-profiles-2014/

3. Economic Activity

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

Economically active as % of (estimated) working age population (16 – 64)

Source: Official Labour Market Statistics (nomis).

Orkney’s active percentage is significantly above the national averages.

The following information from the 2011 Census was published in November 2013.

Economically active people aged 16 to 74 by Council area, Scotland, 2011 (%)

Source: 2011 Census.

Although the Census data is older than the most recent information published by the Scottish Government (https://www2.gov.scot/Topics/Statistics/Browse/Labour-Market/Local-Authority-Tables), it is likely to be more reliable to the larger scale of survey involved, with the Census covering every household in the United Kingdom.

It should also be noted that the Office for National Statistics’ data covers and age range of 16 to 64 years, whereas the 2011 Census covers from 16 to 74 years.

Employee jobs by industry

All persons aged 16 – 74 in employment: Orkney 11319; Shetland 12961; Scotland 2516895.

Source: Scotland Census 2011.

The 2011 census figures illustrate that the industries with highest employment percentages in Orkney, Shetland and Scotland were ‘Human health and social work activities’ followed by ‘Wholesale and Retail trade, repair of motor vehicles and motorcycles’ and ‘Construction’. ‘Agriculture, forestry and fishing’ was the next highest industry employer in Orkney.

Occupation

Source: Scotland Census 2011.

The main occupation of ‘persons in employment 16 to 74’ in Orkney and Shetland were ‘Skilled trades occupations’. This is also reflected in the levels of employment in Industries such as ‘Construction’ and ‘Wholesale and retail trade, repair of motor vehicles and motorcycles’ in Orkney. Despite a fall in the numbers between 2017 to 2018, self-employment is also more prevalent in Orkney than in the rest of Great Britain.

Self-employment – regional comparison

Source: Orkney and Scotland data – Scottish Government. Great Britain – Office for National Statistics, Annual Population Survey.

Workforce Qualifications

In terms of accredited skills and education at a higher level National Vocational Qualification (NVQ) 4 and above, the most recent figures below suggest that the Orkney working-age population lags slightly behind that of Scotland but slightly ahead of the aggregated Great Britain labour pool. When it come to the other NVQ qualifications, Orkney is slightly behind both Scotland and Great Britain. However, when it comes to other qualifications, Orkney is noticeably ahead of both Scotland and Great Britain.

Qualifications – people aged 16 to 64, January to December 2017

Source: Office for National Statistics, Annual Population Survey.

Notes: NVQ is known as Scottish Vocational Qualification (SVQ) in Scotland.

In vocational terms NVQ4 indicates management skills; and in academic terms, NVQ4 or above indicates HND or above (Scottish Credit and Qualifications Framework level 8 and above).

indicates sample size is too small for reliable estimate.

Highest Level of Qualification of People aged 16 and over by Council area, Scotland, 2011 (%)

Source: 2011 Census, published in November 2013.

Notes:

• Census level 1 qualifications are at a Standard Grade / SVQ 1 or 2 equivalency.
• Census level 2 qualifications are at a Higher Grade / SVQ 3 equivalency.
• Census level 3 qualifications are at an HNC / HND / SVQ 4 equivalency.
• Census level 4 qualifications are at Degree / SVQ 5 and above.

It is unfortunate that the data sets used by the Office for National Statistics and the 2011 Census are not directly comparable, but the Census information indicates that Orkney is slightly above the Scottish average attainment in terms of the highest-level qualifications (Degree / SVQ 5 and above). Again, the 2011 Census figures include information about those aged 65 and over, whereas those from the Office for National Statistics do not.

Enterprises

Reliable and inclusive data on business churn is not available. However, an enterprise birth and death rate is available in respect of what is termed ‘Active Registered Enterprises’, in other words, those which had either turnover or employment at any time during the reference period and were registered with Her Majesty’s Revenue and Customs (HMRC) for VAT and / or PAYE.

Active registered enterprises – Orkney

Source: Office of National Statistics, Business Demography.

The availability of new business start-up grant funding via Orkney Islands Council’s Business Gateway service commenced in April 2011. This has contributed to the higher business birth rates in 2011 and 2012, with 34 new businesses supported with advice and / or funding in the two-year period to end March 2013. This was followed by 47 in year ending March 2014 and 49 in year ending March 2015. The numbers of businesses supported in the years ending March 2016 and 2017 were 44 and 49 respectively. 2018 also witnessed 49 new businesses supported by the local Business Gateway service.

The Scottish Government’s ‘Businesses in Scotland’ publication provides information on the characteristics of Scotland’s business stock – including Orkney, and how business stock has changed over time. The publication includes all enterprises that operate in Scotland regardless of where the enterprise is based. It shows the estimated total enterprises, registered for VAT and / or PAYE, the table below shows information for Orkney over the last 6 years.

Active number of Orkney enterprises

Source: The Scottish Government, Business in Scotland Tables.

There are a substantial number of enterprises in Orkney which have no employees and are therefore not included.

The table shows that the overall numbers of active enterprises has increased in 2018, having remained the same between 2016-2017. There was a notable fall in Agriculture, Forestry and Fishing from 720 to 675. Manufacturing also decreased from 60 to 50. However, there was a significant increase in Electricity, gas, steam and air conditioning supply, from 10 to 30. Information and communication also witnessed an increase between 2017 to 2018, from 15 to 25. Professional, scientific and technical activities saw an increase near to 2016 figures, after a drop in 2017.

Gross Value Added (GVA)

GVA is the measure of value of goods and services produced in an area.

Owing to the irregularity of reporting and the very small number of Orkney businesses sampled, the reporting of productivity (or GVA) by government statistics agencies has traditionally been unreliable. Nevertheless, an indication of trends and comparisons with other areas is provided by the Office for National Statistics, with the most recent data being in respect of 2013.

Regional GVA (£ per head at current basic prices)

Source: Office for National Statistics, Regional GVA NUTS3.

GVA output for Orkney is mainly in public administration, distribution, transport, accommodation and food sectors.

Orkney productivity is typically less than 80% of the Scottish average although the gap appears to be closing slightly.

Household income

In terms of household income, the following table can provide an indication of changing household wealth between 1999 and 2013. Gross Disposable Household Income (GDHI) is money left after expenditure associated with income, for example, taxes and social contributions, property ownership and provision for future pension income. It is calculated gross of any deductions for capital consumption.

Regional GDHI (£ per head at current basic prices)

Source: Office for National Statistics, Regional GDHI NUTS3.

Orkney is noticeable in having the highest GDHI figures in 2013 of those areas surveyed, broadly in line with Shetland, and slightly higher than the Scottish average.

There are fairly wide variations in the extent of increase in the various areas over the years with Orkney’s GDHI displaying increases well above the regional and national averages.

GDHI percentage increase

Source: Office for National Statistics.

It is not possible to establish the reasons for this but Orkney and the wider Inverness/Moray area, both having strong agricultural economies, demonstrate the greatest increases over the period 2005-2013.

Additionally, Orkney has a small number of residents working off-shore in higher paid jobs which may impact figures.

During the same period, the construction sector in Orkney was, overall, also healthy, partly as a result of significant public sector investment. Nevertheless, the possible explanations are purely speculative, and the income statistics also come with the usual health warning with regard to risk of error due to small sample sizes.

4. Labour Market

Claimant level (% Jobseekers) in Orkney 2007 - 2018

Source: Office for National Statistics.

Note: These unemployment rates represent the proportion (%) of the resident population who are of working age and who are seeking employment (ages 16 – 64).

Up to September 2015 the headline Claimant Count figures include people claiming Jobseeker’s Allowance (JSA). As of October 2015, this figure includes people claiming JSA and Universal Credit.

The above table illustrates the unemployment rate measured by Claimant Count rate (%).

The figures between 2014 and 2015 may be more difficult to compare with the introduction of Universal Credit figures, now added to those claiming JSA in 2015 figures.

Orkney’s average unemployment rate rose back in 2011 and continued to fall until 2015, with an average level in 0.6%. This compares to average Scottish and UK unemployment rates from December 2015 of 2.1% and 1.8% respectively.

Unemployment rate for 2016 saw a slight increase again 0.8%, compared to 2.2% for Scotland. In 2017 the unemployment rate witnessed another slight increase to 0.9%, whilst it stood at 2.3% for Scotland. 2018 witnessed a decrease, back to the 2016 average.

Job Seeker Allowance (JSA) (old measurement)

Source: Office for National Statistics – Claimants change and LA Comparison.

Notes: Totals may not always tally due to round and, owing to rounding, the apparent movements by age group and duration may therefore be distorted.

The above table illustrated the old measurement for Claimant Count which was based on JSA statistics.

Due to the rollout of the Universal Credits the value of using Claimant Count will have diminished and Universal Credits data is now being included along with JSA data under Claimant Count Tables. JSA will no longer be designated as National Statistics and will be labelled Jobseeker’s Allowance rather than Claimant Count.

The Claimant Count until 2012 was towards increasing numbers of job seekers. Whilst the figures for 2012 were, overall, more encouraging than those for 2011, that year saw a notable increase in those out of work for more than 12 months.

Following on in 2012, the reducing numbers of job seekers were evident, with continuing trend of reduction over the period 2012 to 2014. The age group with the largest reduction of job seekers in 2014 was the age bracket 25 – 49.

The age bracket displaying the largest % increase in Orkney unemployment during the years 2009 to 2014 is the 18 – 24 age group.

Claimant Count: Job Seeker Allowance and Universal Credit

These are experimental statistics due to Universal Credit estimates still being developed by Department of Work and Pensions (DWP).

Source: Office for National Statistics – Claimants change and LA Comparison.

Notes: Totals may not always tally due to round and, owing to rounding, the apparent movements by age group and duration may therefore be distorted.

These figures are taken from experimental series that counts the number of people claiming Jobseekers Allowance plus those who claim Universal Credit who are out of work and replaces the number of people claiming Jobseekers Allowance as the headline indicator of the number of people claiming benefits principally for the reason of being unemployed.

To allow comparison going forward a new table from 2015 onwards has been developed above.

The data relating to age breakdowns, flows of claims or for duration of claim cannot be extracted from the Universal Credit. Therefore, these series will be suspended from June 2015.

5. Agriculture

Herd / Flock

Livestock values returned at Orkney Auction Mart have fallen since reaching a high in 2014.

Orkney Auction Mart Prices – Average price, pence per kg

Source: Orkney Auction Mart.

2018 statistics are the average price, not average price per kilo. This is due to changes in the monitoring system used by Orkney Auction mart.

Lamb values per kg are unavailable for 2013 onwards, however values per head is available below.

Lamb values per head fell slightly between 2014-2015, however values did recover slightly in 2016 and witnessed a stronger increase in 2017. 2018 has seen values continue to rise, although only slightly.

Livestock Numbers

Herd / Flock size in Orkney (2011 – 2018)

Source: Scottish Government’s Rural and Environmental Research and Analysis Directorate (RERAD), agriculture census annually at June.

Dairy cattle

In 2017 Orkney farms held 49% of all dairy cattle in the North West of Scotland (Shetland, Orkney, Hebrides and Highland). The Orkney figures for 2018 saw a very slight decrease in herd size.

Beef cattle

The reporting breakdown for beef cattle changed slightly in 2013 and therefore comparisons of subsequent data with that of previous years may not always be entirely like for like.

Overall there had been little change in the number of breeding cows over the 2008 - 2015 period, at the 2015 census date, Orkney was home to 36% of all female beef cattle in the North West of Scotland region. However, the 2016 census data shows a significant fall in the number of all cattle in Orkney in 2016. This was likely to have been a knock-on effect of the poor weather in 2014 / 2015 which caused local shortages of winter feed and bedding and farmers reducing stock levels as a consequence. 2017 and 2018 continued to witness a decline in beef cattle numbers with a 3.7% decrease on the previous year figure.

Sheep

The table above illustrates that, in 2014, Orkney’s sheep flock decreased by 3.5% on the previous year, to a level that was maintained in 2015. Over the 2009 to 2015 period, the number of breeding ewes declined by almost 10%. However, in 2016 and 2017 levels have continued to recover slightly. 2018 figures saw a decrease back towards the numbers from 2015.

Milk production

The level of milk production took a fall back in 2010 - 2011 when two dairy farms withdrew from the market which resulted in the loss of almost 1 million litres of production. Milk production has declined significantly since its peak in 2009 - 2010. However, the figure for 2017/18 shows a 3.1% increase in production on the previous financial year. The estimate for 2018/19 remains similar to the previous year.

90% of all Orkney milk production goes towards the manufacture of Orkney Cheddar, produced by the Orkney Cheese Company Ltd.

Orkney Milk Production

Livestock Shipments

The following table shows that livestock shipments through Orkney Islands Council (OIC) ports have increased significantly since 2007, with cattle shipments up by 41% over the period to 2015 and sheep movements up by 263% over the same period.

However, as data for the privately-run St Margaret’s Hope to Gills Bay ferry service is not published, total livestock shipments from Orkney cannot be accurately ascertained.

Livestock Shipments from Orkney (OIC Ports)

Source: OIC Marine Services.

The increase in 2015 and 2016 shipments possibly reflects the severe weather-related problems experienced in Orkney during summer-autumn of 2015.

Land Use

Agricultural Land Use in Orkney (hectares)

Source: Rural and Environmental Research and Analysis Directorate (RERAD) – Section C Times Series.

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

The comparatively large fluctuations in total land use reported during the 2009 – 2011 period may have been caused by changes to data collection and reporting processes, and the subsequent recovery of the reported land use statistics from 2012 onwards would appear to bear this out.

The total land area utilised by agriculture remained largely the same between 2012 – 2016 with the area of land utilised increasing in 2016. 2017 witnessed a 4.5% decrease from the previous year. However, this trend was reversed during 2018, with a 0.5% increase on 2017 figures.

Grassland remains the largest land use in Orkney, which suits Orkney’s climate well and would support the production of beef cattle, dairying farming and sheep farming in Orkney.

Cereals

Barley continues to be the largest cereal crop grown in Orkney at 3714 hectares in 2018, although production continues to slowly reduce.

Potatoes

The table shows that land used for growing potato crops in Orkney peaked in 2013 at 44 hectares and has fallen significantly over the following years. However, 2018 did witness a 10% increase on the previous year.

Employment in Agriculture

Agricultural Employment in Orkney (2011 – 2018)

Source: Rural and Environmental Research and Analysis Directorate (RERAD) – Section C Times Series.

Total employment in agriculture between 2011 – 2018 has decreased by 115. However, within this 8-year period the figures have fluctuated with 2016-2017 witnessing a slight increase. Falling levels of employment over the past 8 years is probably symptomatic of the increasing industrialisation within the sector.

Common Agricultural Policy (CAP) Subsidies

The total of all subsidy payments received by Orkney farmers during recent years under the EU Common Agricultural Policy (CAP) 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, although the significant reduction in the number of recipients in 2012 is notable.

CAP subsidy payments

Excludes payments made in respect of Rural Priorities Contracts.

Source: Scottish Government Rural Payments and Inspections Directorate.

Note: 2009 – 2012 are figures for calendar year rather than financial year as previously reported. These figures relate to payments made in respect of 12-month periods ending on 15 October.

The subsidy payments have increased by over £3.5 million from the estimated figures of 2015 – 2017. As such, these payments remain critical to the viability of Orkney farming. Significant variations in annual values are largely due to fluctuation in the exchange rates prevailing at the appointed conversion date, with annual subsidies being allocated in euros (€).

Following the outcome of the European referendum in 2016, the long-term future of direct agricultural support is still unknown at this time.

6. Fishing

The size and make-up of the fleet remained relatively unchanged between 2007 and 2011. Numbers have continued to decline slightly since 2011, especially amongst the smaller vessels. Figures between 2017-2018 have remained fairly static.

Orkney Fishing Fleet

Source: Marine Scotland Science Scottish Sea Fisheries Statistics ‘Vessel and Employment’.

Pelagic / demersal landings by Orkney vessels

Source: Scottish Sea Fisheries statistics.

Along with reduction in fleet size, the volume and value of landings of demersal and pelagic fish by Orkney Vessels fell considerably in 2012 and 2013; however, this was followed by considerable increase in value of landings in 2014.

Subsequently though in 2015 the value of landings suffered a large decrease again although the weight of landings in 2015 was slightly higher than the previous year.

2016 witnessed a reverse in the previous year, with landings decreasing by 19% but the value of the landings increasing by 66%. This represents the highest value of landings since 2011. Whilst 2017 witnessed a 14.5% drop in landings and a 4% drop in value, the 2017 value is similar to 2007 despite landings for that year being considerably higher. In 2018, landings took a considerable drop, falling by 20% on the previous year. Despite this, the value witnessed a small increase over the same period.

With so few Orkney vessels in the demersal fleet, variations might be due to a number of factors, for example, a vessel temporarily laid up, quota variations, or changing market prices.

Employment

With vessel numbers falling in general, lower regularly employed in the sector is to be expected. In 2016 this figure has dipped under 200, representing a 3% decrease from the previous year. In recent years the figure has witnessed an increase, with lower numbers partially employed.

Orkney fishermen employed

Source: Marine Scotland Science.

Note: Figures relate to those employed on vessels which submit landing declarations to Marine Scotland.

7. Shellfish

Shellfish species landed in Orkney since 2010, their live weight and values are as follows.

Quantity (tonnes)

Value (£000s)

Source: Scottish Sea Fisheries statistics.

8. Fish Farming

Production

The following table shows salmon and smolt production in Orkney as presented by the Scottish Government.

Salmon and smolt production in Orkney

Source: Marine Scotland Science – Scottish Fish Farm Production surveys.

Salmon production soared in 2010, up by 51% on the previous year, but returned to just above 2009 levels in 2011. However, again the 2012 salmon output levels soared with 2017 being the highest over the period reviewed.

Smolt production has been relatively steady between 2012-2015 with little variation in numbers produced. Between 2016-2018 Salmon production has increased, with an increase of 4,200 tonnes in 2018 over the previous year. This is despite smolt production falling.

Employment

Employment levels in the industry fluctuate from year to year and no explanation is offered for this. The following table shows fish farming employment in Orkney as presented by the Scottish Government.

Fish farming employment in Orkney

Source: Marine Scotland Science – Scottish Fish Farm Production surveys.

The above statistics are not however supported by figures reported by the trade body, the Scottish Salmon Producers Organisation (SSPO) who reported that direct employment by their members in Orkney increased from 91 in 2011 to 115 in 2012 and 135 in 2016. It is not known why the two figures differ.

Scottish salmon farming 2017

Source: November report – Economic Report 2017 – Scottish Salmon Producers’ Organisation.

The most recent Scottish Salmon Producers Organisation Economic Report from 2017 states that the industry in Orkney (along with Highland) saw significant growth in capital investment to develop new technology and farming systems to meet the needs of modern fish farming.

9. Energy

Oil and Gas

The volume of crude oil leaving the Flotta Oil Terminal back in 2012 was almost half of that shipped in 2010 and there were no shipments of propane gas.

2015 and 2016 has seen significant increase in volume of crude oil leaving Flotta. In 2016 levels were almost 3 times that shipped in 2012. This increase is as a result of the Gold Eagle field which began producing oil in late 2014. After witnessing a 5.5% increase during 2017 on the previous year, 2018 saw a reduction in crude oil tonnage of approximately 30%.

Foinaven oil has not been shipped via the Flotta terminal since 2008.

Annual Tonnages of Cargoes Loaded from the Flotta Oil Terminal

Source: OIC Marine Services.

Ship to Ship Transfers

Following the high of 2009, there was a steady reduction in the number of ship-to-ship (STS) transfers in Scapa Flow, culminating in there being no such activity in 2012.

Following approval of the new OIC ballast water management policy in 2013, 2015 again saw the commencement of ship to ship transfers, and 2016 saw a significant increase in the number of STS transfers with 22 transfers taking place. 23 transfers took place in 2017.

Ship to ship transfer of liquefied natural gas (LNG) took place in 2016 following previous transfers back in 2013, 2010 and 2007.

The world’s first liquefied propane gas (LPG) ship to ship transfer was managed in Scapa Flow in 2016 with 15,464 tonnes transferred. This achievement was matched in 2017. 2018 witnessed a significant increase in ship to ship transfers and oil tonnage, as Scapa Flow is continued to be marketed for this purpose.

Ship to ship operations

Source: OIC Marine Services.

Accommodation Rigs

New economic activity has been attracted to Scapa Flow as sheltered storage for accommodation vessels whilst they undergo maintenance. Late 2015 saw the first arrivals of 2 Semi-Submersible accommodation rigs to Scapa Flow for maintenance programmes.

Renewable Generation

In 2017 Orkney produced 122% of its electricity demand from renewables. In 2018 Orkney produced 104.7% of its electricity needs.

Source: Orkney Renewable Energy Forum

Wind Energy

The Department of Business, Energy and Industrial Strategy provides ‘Sub-national Feed-in Tariff Statistics’ which is maintained by Ofgem and a recent extraction of information for quarter 1 2019 highlights there were 766 feed in tariff (FIT) eligible wind generators in Orkney, of which 654 were domestic.

In 2012 a moratorium was imposed on new generator connections to the grid in Orkney, this has resulted in delays to new developments being realized. Grid curtailment continues to be an issue impacting on revenue generation.

10. Transport

Stromness to Scrabster Route (Northlink Ferries)

Traffic on Stromness to Scrabster Route (Northlink Ferries)

Source: OIC Marine Services.

The upward trend in passenger and accompanied car numbers on the Stromness to Scrabster route since 2002 came to a halt in 2008, with a brief recovery in 2009. However, passenger and accompanied car numbers again fell in 2010 and 2011. An upward trend has however been evident again since 2014, with significant increases in 2017 and 2018.

Pentland Ferries does not publish the traffic statistics for its St Margaret’s Hope to Gills Bay service.

Shetland to Kirkwall to Aberdeen Route (Northlink Ferries)

Traffic on Shetland to Kirkwall to Aberdeen Route (Northlink Ferries)

Source: OIC Marine Services.

There was a slight increase in passenger and accompanied cars on the Shetland to Kirkwall to Aberdeen route in 2011, however, following this there was a downward trend, with a slight recovery in 2015. There was a slight decrease in passengers in 2016, however 2017 and 2018 witnessed an increase in all traffic.

Commercial vehicles and cargo figures significantly increased in 2012 by 31.8% and 46.4% respectively on the 2011 figures. The numbers continued to increase until 2015 and have remained fairly constant in 2016. There was however a significant increase in cargo in 2017, with an additional 35639 tonnes shipped. This trend has continued into 2018, with a further 37327 tonnes shipped.

Kirkwall Airport Traffic

Source: Highlands and Islands Airports Limited (HIAL), Annual Reports.

The total number of passengers in 2013 - 2014 increased by 13,671 and represented an 8.31% increase. The number of passengers moving through Kirkwall airport since 2013 - 2014 has remained fairly constant, with 2016 - 2017 witnessing an increase of 1835 passenger and 74 aircraft movements. 2017 – 2018 saw a larger increase of 16392 passenger and 547 aircraft movements.

Orkney’s Internal Ferry Routes

Passengers — single journeys, year ended March

Vehicles — single journeys, year ended March

The total levels of passenger numbers on the internal ferry routes had been decreasing since 2013. However, the 2017 figures have shown an increase of 4.5% on the previous year. This trend has continued, with a 0.7% increase witnessed in 2018.

Figures for the internal ferry routes for Shapinsay and Lyness continue to show significantly higher passenger numbers than other ferry routes in Orkney.

Vehicle movements have continued to witness an increase, up 3.1% on 2017 figures. The Lyness and Flotta route continues to show the highest number of vehicle numbers using those crossings.

11. Housing

Average Purchase Price of Residential Property (£)

Source: Registers of Scotland.

Orkney witnessed a steady increase in house process between 2014-2017, with the average increasing by £21731. This has continued between 2017-2018. Whilst still behind the Shetland, Highland and Scotland purchase price averages, Orkney does have considerably higher average than Eilean Siar.

Number of Residential Property Sales

Source: Registers of Scotland.

In terms of the total numbers of residential property sales, the property market in Orkney witnessed a 24% increase between 2015-2016. 2016-17 saw a much more modest increase of just 2, with the total reaching 418 properties. This figure went down to 397 in 2018, following an overall regional and national trend of reducing sales.

Value of Residential Property Market – Number (£ Million)

Source: Registers of Scotland.

All local authority areas highlighted above have witnessed increases in the value of their residential property. Orkney as witnessed a significant increase between 2015-2018 of 0%.

New Housing

Housing Starts and Completions in Orkney

Orkney Housing Association Limited (OHAL).

A total of 2,283 new houses have been completed during the past fifteen years. The number of completed private developments make up 65% of the total.

12. Tourism

Staying Visitors

All staying visitors (000s)

Source: Global Tourism Solutions – Scottish Tourism Economic Activity Monitor Trend report.

The annual Scottish Tourism Economic Activity Monitor (STEAM) reported ‘All staying visitors’” (Visitors who are staying overnight for one or more nights away from home for holidays) was 193410 visitors, a slight decrease from 2017 figures.

Staying visitor’s type of accommodation

Source: Global Tourism Solutions – STEAM Trend report.

In 2018, the number of visitors staying in paid accommodation was163920, a slight decrease of 0.2% from 164270in 2017. The number of visitors staying with friends and relatives in 2018 was29500, a decrease of 2.2% from 30180in 2017.

Estimated Economic Impact

Source: Global Tourism Solutions – STEAM Trend report.

The Economic Impact of Tourism to Orkney in 2018 was estimated as £77970000, a small increase from the estimated figure in 2017.

Orkney distribution of Economic Impact by sectors

Source: Global Tourism Solutions – STEAM Trend report.

Visitor Attractions

In both 2017 and 2018 the top visitor attraction by numbers was identified as St Magnus Cathedral. The top paid admission attraction continues to be Skara Brae.

With the exception of the Orkney Museum, the Pier Arts Centre and the Italian Chapel, all visitor attractions in the list witnessed an increase between 2017 and 2018.

Source: VisitScotland, Tourism in Scotland’s Regions and Moffat Centre Visitor Attraction Monitor, Glasgow Caledonian University, and visitor attractions.

Cruise Vessels

Visiting Cruise Vessels

Source: OIC Marine Services.

There has been an upward trend in the number of passengers and port calls from visiting cruise vessels since 2011. The increase in passenger numbers of 13639 in 2018 represents a 12% increase on 2017 figures. The number of cruise vessels visiting Orkney has almost doubled between 2010 – 2018.

Island Visitor Survey 2017

The most recent Islands Visitor Survey 2017 was commissioned by Orkney Islands Council, in partnership with VisitScotland.

The survey from 2017 face-to-face interviews at key exit points from the islands, as well as a follow-up online survey to gather more detailed feedback. Some of the main headlines were:

The Visitor Experience

The Islands Visitor Survey 2017 Orkney published the following:

Influence of visit

Age distribution of visitors to Orkney

Gender profile

Number of people in party

Main type of transport during visit

Number of nights in Orkney

Accommodation stayed in during visit

Sources of information

Activities undertaken

Most visited attractions