The Importance for the Fish Processing and Merchanting Sector of Landinsg of Fish from the Waters of Pentland Firth and Orkney to the Local and Scottish Economies

2. The Importance of Fish Processing and Marketing of Landings of Fish from the Pentland Firth and Orkney Waters to the Local Economy

The multipliers estimated in this study for the impact of fish and shellfish processors and merchants in North Highland and Orkney on the local economy are set out in Table 2 and are given for comparison against the multipliers estimated from the model for other businesses in North Highland and Orkney. North Highland is defined as the local authority areas of Caithness, Sutherland, Scrabster and Wick.

Table 2: Multipliers for the Activity of Pentland Firth and Orkney Waters Fish Processing Industry and Fish Merchants on the Local Economy, 2011.

Type I	Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans	Other Businesses
Output	1.76	1.74	1.77	1.75	1.41
Income	2.20	2.04	2.63	2.04	1.41
Employment	1.50	1.40	1.69	1.43	1.41
Type II
Output	3.03	3.11	2.85	3.12	2.75
Income	4.29	3.98	5.13	3.98	2.75
Employment	2.29	2.14	2.65	2.17	2.75

The Leontief Technology Matrix for Type I demand-driven multipliers for the North Highland and Orkney economy derived from the Type I Consolidated Transactions Matrix is set out as Table A2.1 in the Appendix to Section 2. That for the Type II multipliers is given in Table A2.2.

The Type II multipliers are greater than those of Type I as a consequence of their definitions, since besides the direct and indirect effects of Type I, the Type II multipliers include also the induced effects on the broader local economy.

The levels of the multipliers are generally plausible. Determining the levels of some of the figures to be included in the Consolidated Transactions Matrices arising from trade among the merchants and processors has necessitated closing the Matrices.

The effect of this is to assume that leakages and injections to the local economy are in balance and therefore that the circular flow of income in the locality is in balance. Both these indicate an economy which is in a stable equilibrium.

The output, income and employment (in full-time equivalent jobs) in North Highland and Orkney dependent on the presence of the fish and shellfish processors and merchants are set out in detail in Tables 3, 4 and 5.

Table 3: Dependency of the Local Economy on the Pentland Firth and Orkney Waters Fish Processing Industry and Fish Merchants for Output

	Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans
Direct and Indirect Effects, Type I, (£m)	£0.39	£7.12	£0.90	£1.99
Direct, Indirect and Induced Effects, Type II, (£m)	£0.67	£12.74	£1.44	£3.55

The results suggest that £10m of direct and indirect effects rests on the initial £6m output of the fish and shellfish processors and merchants. When induced effects are added the dependency rises to £18m.

They also indicate that £2.9m of direct and indirect effects rests on the initial £1.4m income of the sector rising to £5.7m when induced effects are included.

Table 4: Dependency of the Local Economy on the Pentland Firth and Orkney Waters Fish Processing Industry and Fish Merchants for Income

	Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans
Direct and Indirect Effects, Type I, (£m)	£0.10	£2.04	£0.20	£0.57
Direct, Indirect and Induced Effects, Type II, (£m)	£0.20	£3.99	£0.39	£1.11

It has been difficult to determine precisely the number of people employed in the sector. A significant proportion of the employees of both the processors and the fish merchants works part-time. Their hours vary between person and between season.

In addition, among the smallest operations there is a degree of contribution from family members which is frequently unpaid and flexible in the extreme.

Nevertheless it has been calculated that there are the full-time equivalent of 112 people working in the sector in North Highland and Orkney on the product of the Pentland Firth and Orkney waters. These divide as to 10 working on demersal and pelagic fish (the pelagic segment is minute) and molluscs, and 102 on crustaceans.

Table 5: Dependency of the Local Economy on the Pentland Firth and Orkney Waters Fish Processing Industry and Fish Merchants for Employment

	Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans
Direct and Indirect Effects, Type I, FTE Jobs	6	112	10	31
Direct, Indirect and Induced Effects, Type II, FTE Jobs	9	171	16	48

160 jobs in the North Highland and Orkney economy are estimated to depend directly and indirectly on the 112 people estimated to be working in the sector in North Highland and Orkney and when induced effects within the locality are added the figure rises to 243 ^[3] .

Appendix to Section 2

Closed Input-Output Table Derivatives for the Local Economy to produce Type I Multipliers

Table A2.1: Technology Matrix for Leontief Demand-Driven Type I Multipliers for the Local Economy, 2011 (Closed)

%	2011	Purchaser
		Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans	Other Businesses
Producer	Processors and Merchants: Orkney Landings of Non-Crustaceans	0.075	0.000	0.000	0.000	0.000
	Processors and Merchants: Orkney Landings of Crustaceans	0.000	0.020	0.000	0.000	0.000
	Processors and Merchants: North Highland Landings of Non-Crustaceans	0.000	0.000	0.100	0.000	0.000
	Processors and Merchants: North Highland Landings of Crustaceans	0.000	0.000	0.000	0.050	0.000
	Other Businesses	0.445	0.500	0.420	0.470	0.291
	Total Primary Inputs	0.520	0.520	0.520	0.520	0.291
	Households	0.210	0.245	0.150	0.245	0.346
	Indirect Taxes & Profits	0.270	0.235	0.330	0.235	0.363
	Total Inputs	1.000	1.000	1.000	1.000	1.000

Note: Some columns and rows may not exactly add-up owing to rounding.

Closed Input-Output Table Derivatives for the Local Economy to produce Type II Multipliers

Table A2.2: Technology Matrix for Leontief Demand-Driven Type II Multipliers for the Local Economy, 2011, (Closed)

%	2011	Purchaser
		Processors and Merchants: Orkney Landings of Non-Crustaceans	Processors and Merchants: Orkney Landings of Crustaceans	Processors and Merchants: North Highland Landings of Non-Crustaceans	Processors and Merchants: North Highland Landings of Crustaceans	Other Businesses	Households
Producer	Processors and Merchants: Orkney Landings of Non-Crustaceans	0.075	0.000	0.000	0.000	0.000	0.000
	Processors and Merchants: Orkney Landings of Crustaceans	0.000	0.020	0.000	0.000	0.000	0.000
	Processors and Merchants: North Highland Landings of Non-Crustaceans	0.000	0.000	0.100	0.000	0.000	0.000
	Processors and Merchants: North Highland Landings of Crustaceans	0.000	0.000	0.000	0.050	0.000	0.000
	Other Businesses	0.445	0.500	0.420	0.470	0.291	1.000
	Households	0.210	0.245	0.150	0.245	0.346	0.000
	Total Primary Inputs	0.730	0.765	0.670	0.765	0.637	1.000
	Taxes, Subsidies, Imports and Profit	0.270	0.235	0.330	0.235	0.363	0.000
	Total Inputs	1.000	1.000	1.000	1.000	1.000	1.000

Note: Some columns and rows may not exactly add-up owing to rounding.