Ayrshire Socio-Economic Profile and Analysis · 2017. 8. 16. · Ayrshire Socio-Economic Profile...

Ayrshire Socio-Economic Profile and Analysis

Final Report

June 2015

Ayrshire Socio-Economic Profile and Analysis Final Report

www.sqw.co.uk

Contents

Executive Summary .................................................................................................................. i

1. Introduction .......................................................................................................................... 1

2. Economic Performance ....................................................................................................... 2

3. People and Profile of the Workforce ................................................................................ 11

4. Travel and Tourism ............................................................................................................ 26

Contact: Mark Bradshaw Tel: 0131 2430725 email: [email protected]

Approved by: Bruce Macdonald Date: 2/7/15

Director


i

Executive Summary

1. South Ayrshire Council commissioned SQW in June 2015 to prepare a socio-economic profile

and analysis of Ayrshire. This report presents the main findings of the study.

2. Perhaps most importantly, in terms of economic performance, Ayrshire lags significantly

behind national averages. Growth in GVA (as measured in current prices) in East and North

Ayrshire has not only consistently been well behind Scottish and UK levels, it has diverged

further over time. In 2014 prices, GVA actually fell between 1997 and 2012.

3. Productivity (GVA per worker) in Ayrshire is also below the national average. This is partly a

result of an ageing population but also because employment is skewed towards what tend to

be lower value occupations. For example, there are disproportionately more people working

in retail and tourism but smaller proportions working in the high productivity sectors such as

professional, scientific and technical employment.

4. Another cause is in commuting patterns. In 2011, there was a net outflow of 20,000 residents

in Ayrshire, mainly into Glasgow. The number of Ayrshire residents working in Glasgow

increased by 22% between 2001 and 2011.

5. Tourism activity has also fallen in recent years. The total number of tourist trips (domestic

and international overnight trips) to Ayrshire fell between 2009 and 2013 in direct contrast

to a pattern of overall growth in Scotland. In the past five years, tourism performance in

Ayrshire appears to be diverging from growth in Scotland. This, in part, may be the result of

falling passenger numbers at Prestwick airport which have declined by 58% since 2004.

Findings

While GVA in Scotland grew by 73% in current prices to 2012, growth in South

Ayrshire was slower (53%) and weaker still in East and North Ayrshire (22%). Using

2014 prices, GVA has actually fallen over this time in East and North Ayrshire.

Although GVA per head has remained around 90% of the UK figure in South Ayrshire,

in East and North Ayrshire this was much lower in 1997 (which was 76% of the UK

figure) but has continued to fall even further from the national average (to just 54% of

the UK level by 2012).

Productivity (GVA per worker) in Ayrshire is below the national average although

South and North Ayrshire are fairly close to the median value (£38,362). East

Ayrshire is lower (£33,000).

The relatively low GVA per head is partly a result of an ageing population, but also

because Ayrshire employment is skewed toward what tend to be lower value

occupations. For example there are disproportionately more people working in retail

and tourism but smaller proportions working in the higher productivity sectors such

as professional, scientific and technical employment, and information and

communications.


ii

Earnings of full time workers in South Ayrshire are slightly above the average for

Scotland as a whole, but slightly below average in East and North Ayrshire.

As with the GVA analysis, the number of registered businesses in Ayrshire has also

fallen in recent years compared to growth nationally, with North Ayrshire

experiencing the largest decline.

The profile of businesses is also skewed toward lower added value with more

operating in retail and tourism-related sectors and fewer in professional, scientific &

technical firms, relative to Scotland.

Although the business birth rate in Ayrshire has increased in recent years, it has

remained consistently below the national average since 2005.

Business expenditure on R&D in Ayrshire is below the national average, with

expenditure particularly low in East and North Ayrshire.

In terms of population, modest growth in East, North and South Ayrshire has lagged

well behind Scotland over the past decade. The profile of Ayrshire’s population is also

older in comparison with Scotland as a whole, with a greater proportion of residents

at or above retirement age. This pattern is expected to increase over time.

The population in Ayrshire is also expected to decline over the coming decade, with

the majority of this decline concentrated in North Ayrshire.

The employment rate is below the national average in East, North and South Ayrshire,

partly reflecting the older population. Although the region was hit badly by the

recession the employment rate has increased steadily since 2012.

Ayrshire is also a home for a significant number of commuters. According to Census

data, Ayrshire has a net outflow of almost 20,000 residents mostly into Glasgow.

Approximately 15,000 Ayrshire residents were unemployed in 2014 with the greatest

concentration in East Ayrshire. Since 2007/08, there has been a significant increase

in the number of school leavers staying in education. School leavers in Ayrshire tend

to enter further education, but are less likely to go into higher education than in other

parts of Scotland.

Ayrshire residents of working age are also less likely to have higher level

qualifications compared to Scotland as a whole.

Consistent with the GVA analysis, there were just over 6,000 fewer jobs in Ayrshire in

2013 than in 2009. The fall in employment is mainly concentrated in East Ayrshire.

Ayrshire residents are more likely to be employed in caring, service and elementary

occupations and less likely to work in professional occupations in comparison to

Scotland as a whole.

In the last decade, passenger numbers and freight tonnage have fallen substantially at

Prestwick airport.


iii

The total number of tourist trips (domestic and international) and expenditure in

Ayrshire declined between 2009 and 2013, in contrast to the overall growth in

Scotland.

Between 2006 and 2010, Ayrshire and Arran benefited from a similar level of growth

in international tourism expenditure to Scotland. However, between 2010 and 2014,

the value of international tourism in the region fell by 23% compared with growth of

21% in Scotland.

Although the number of day visits to Ayrshire has increased, the level of expenditure

on these visits has dropped off in the last year.


1

1. Introduction

1.1 South Ayrshire Council commissioned SQW in June 2015 to prepare a socio-economic analysis

of Ayrshire (East, North and South). The purpose of this report is to provide a clear profile of

the Ayrshire economy to be used as a background to a new route development strategy for

both passenger and freight services at Prestwick airport.

Key findings

1.2 Perhaps most importantly, in terms of economic performance, Ayrshire lags significantly

behind national averages. Growth in GVA (as measured in current prices) in East and North

Ayrshire has not only consistently been well behind Scottish and UK levels, it has diverged

further over time. In 2014 prices, GVA actually fell between 1997 and 2012.

1.3 Productivity (GVA per worker) in Ayrshire is also below the national average. This is partly a

result of an ageing population but also because employment is skewed towards what tend to

be lower value occupations. For example, there are disproportionately more people working

in retail and tourism but smaller proportions working in the high productivity sectors such as

professional, scientific and technical employment.

1.4 Another cause is in commuting patterns. In 2011, there was a net outflow of 20,000 residents

in Ayrshire, mainly into Glasgow. The number of Ayrshire residents working in Glasgow

increased by 22% between 2001 and 2011.

1.5 Tourism activity has also fallen in recent years. The total number of tourist trips (domestic

and international overnight trips) to Ayrshire fell between 2009 and 2013 in direct contrast

to a pattern of overall growth in Scotland. In the past five years, tourism performance in

Ayrshire appears to be diverging from growth in Scotland. This, in part, may be the result of

falling passenger numbers at Prestwick airport which have declined by 58% since 2004.

Report Structure

1.6 The remainder of this report is structured as follows:

Section 2: provides an analysis of the economic performance of Ayrshire

Section 3: presents an overview of the people and workforce within Ayrshire

Section 4: provides an assessment of travel and tourism activity in Ayrshire.


2

2. Economic Performance

Introduction

This section looks at the economic performance of Ayrshire covering:

Gross Value Added

Productivity

Earnings

Business Base.

Gross Value Added

While GVA in Scotland grew by 73% in current prices to 2012, growth in South Ayrshire was

slower (53%) and weaker still in East and North Ayrshire (22%). Using 2014 prices, GVA has

actually fallen over this time in East and North Ayrshire.

2.1 GVA and productivity are the core indicators of the health of the economy. GVA represents the

value added that is generated for wages and profits, while productivity (measured as GVA per

worker) indicates how much added value is created per job. Different industries have the

potential to generate different amounts of value for the economy. Higher value added jobs are

in engineering, manufacturing, ICT, construction and in professional, scientific and technical

activities. Lower GVA per worker sectors are in retail and wholesale, arts and entertainment,

accommodation and food and drink services. An economy with more activity in higher value

sectors will be wealthier than one that has more activity in lower value added activities.

2.2 Table 2-1 shows how GVA has changed over the 15 years to 2012. While GVA in Scotland in

current prices has grown by 73%, growth in South Ayrshire has been significantly slower

(53%). In East and North Ayrshire growth has been weaker still with just 22% growth in GVA.

In real terms (removing inflation) output has actually fallen over the period.

Table 2-1: GVA 1997 and 2012 selected geographies (GVA in £ millions)

1997 2012 Change

Scotland 61,355 106,342 73%

South Western Scotland 25,891 42,160 63%

East Ayrshire and North Ayrshire mainland 2,400 2,929 22%

South Ayrshire 1,257 1,917 53%

Glasgow City 9,710 17,750 83%

Inverclyde, East Renfrewshire and Renfrewshire 3,997 5,210 30%

North Lanarkshire 2,409 4,890 103%

South Lanarkshire 2,959 4,545 54%

Source: Regional Gross Value Added (Income Approach) NUTS3 Tables (ONS) http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-317145


3

2.3 The figures can be shown graphically, demonstrating the difference between South Ayrshire

which has remained below the Scottish average (and diverging more substantially in 2011

and 2012) and East and North Ayrshire which, particularly since the recession, has been

falling further behind (Figure 2-1).

Figure 2-1: Workplace based GVA at current basic prices

Source: Regional Gross Value Added (Income Approach) NUTS3 Tables (ONS) http://www.ons.gov.uk/ons/publications/re-

reference-tables.html?edition=tcm%3A77-317145

Although GVA per head has remained around 90% of the UK figure in South Ayrshire, in East

and North Ayrshire this was much lower in 1997 (which was 76% of the UK figure) but has

continued to fall even further from the national average (to just 54% of the UK level by 2012).

2.4 The pattern is even starker in Figure 2-2. This uses GVA per head to show how the

relationship between the UK, Scotland and Ayrshire has changed over time. While GVA per

head in Scotland has consistently been slightly below the UK figure (which includes London),

the disparity with East and North Ayrshire has grown year after year. In 2012, the GVA per

head was 54% of the UK level, considerably lower than in 1997.

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ind

ex

19

97

=1

00

Scotland East Ayrshire and North Ayrshire mainland South Ayrshire


4

Figure 2-2: Workplace based GVA per head indices at current basic prices

Source: Regional Gross Value Added (Income Approach) NUTS3 Tables (ONS) http://www.ons.gov.uk/ons/publications/re-

reference-tables.html?edition=tcm%3A77-317145

2.5 There are a number of reasons why GVA and GVA per head has fallen, including the ageing

population profile. However, there has also been changes in the types of employment and

industry in Ayrshire, and their productivity.

Productivity (GVA per worker) in Ayrshire is below the national average although South and

North Ayrshire are fairly close to the median value (£38,362). East Ayrshire is lower (£33,000).

2.6 In terms of GVA per worker, South Ayrshire is in the exact middle of all Scottish local

authorities (Aberdeen and Aberdeenshire are at the top with very high values generated by

the oil industry). North Ayrshire is slightly higher, with East Ayrshire lower than the median.

Table 2-2: GVA per worker (£ millions) in 2012

Geography GVA per worker (£ millions)

Scotland 49,359

East Ayrshire 33,405

North Ayrshire 41,875

South Ayrshire 38,362

Median 38,362

Source: Annual Business Survey Scotland accessed 2015

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201120123

Ind

ex

UK

=1

00

in

ea

ch

ye

ar

Scotland

South Western Scotland

East Ayrshire and North Ayrshire mainland

South Ayrshire

UNITED KINGDOM less Extra-Regio3 and statistical discrepancy


5

Ayrshire employment is also skewed slightly toward what tend to be lower GVA occupations. For example there are disproportionately more people working in retail and tourism but smaller proportions working in the higher productivity sectors such as professional, scientific and technical employment, and information and communications.

2.7 Ayrshire employment is also skewed slightly toward what tend to be lower GVA occupations.

Table 2-3 is organised in order with the high GVA sectors at the top, going to the lowest at the

bottom. The sectors where Ayrshire has above average employment are shown in green and

those where there is lower employment are in red. Overall, a stronger economy would have

more green at the top of the table and more red at the bottom. In the case of Ayrshire, while

there is some green towards the top the higher proportions of employment are generally

towards the bottom of the table.

2.8 For example, Ayrshire has less employment in high GVA activities such as food and drink

manufacture (whisky) relative to Scotland. At the other end of the table it has higher

proportions of the workforce in retail, food and drink service, accommodation and public

sector roles in education, health and social work.

2.9 Of the growth areas it is the smaller proportions of professional scientific and technical

employment, and information and communications that stand out.

Table 2-3: Comparing GVA per head and structure of employment in Ayrshire (2012 data)

Category of employment GVA per worker

in Scotland

% of employment in Scotland

% of employment

in Ayrshire

Manufacture of Food & Beverages £82,969 3% 2%

Manufacture of Coke, Chemicals etc. £65,420 2% 2%

Other manufacturing, Repair and installation £63,119 1% 3%

Civil engineering £61,463 1% 1%

Manufacture of Basic and Fabricated metals £60,378 3% 5%

Prof, Scientific & Technical Activities £60,207 9% 5%

Manufacture of Computer, electronics £59,880 1% 0%

Information and communication £59,385 3% 1%

Real estate activities £58,768 2% 1%

Transport and storage £54,047 6% 6%

Construction of buildings £52,966 2% 1%

Manufacture of Wood, Paper and Printing £47,283 1% 1%

Specialised construction activities £47,200 4% 4%

Administrative and support service activities £34,241 10% 7%

Manufacture of Textiles £33,794 0% 1%

Wholesale & retail trade of motor vehicles £33,231 2% 3%

Retail trade, except of motor vehicles £26,190 14% 18%

Wholesale trade, except of motor vehicles £25,930 4% 4%

Arts, entertainment and recreation £25,453 3% 4%

Accommodation £23,014 3% 5%

Other service activities £20,322 3% 3%

Food and beverage service activities £17,749 6% 7%

Education, human health and social work £13,421 11% 12%

Source: Annual Business Survey Scotland accessed 2015


6

Earnings

Earnings of full time workers in South Ayrshire are slightly above the average for Scotland as

a whole, but slightly below average in East and North Ayrshire.

2.10 Full time workers in Scotland earned an average of £519 per week in 2014, relative to a UK

average of £5181. The corresponding figure for South Ayrshire was above that of the Scottish

and UK average at £535, whilst it was slightly below in both East Ayrshire and North Ayrshire.

Table 2-4 details median gross weekly earnings for each of these areas as a percentage of the

Scottish average.

Table 2-4: Median Gross Weekly Earnings 2014

Full-Time Workers

Median Weekly Earnings % of Scottish average

East Ayrshire £492 95%

North Ayrshire £506 97%

South Ayrshire £535 103%

Scotland £519 100%

UK £518 100%

Source: Annual Survey of Hours and Earnings

Business Base

As with the GVA analysis, the number of registered businesses in Ayrshire has also fallen in

recent years compared to growth nationally, with North Ayrshire experiencing the largest

decline.

2.11 In 2013, there were 11,900 registered businesses in Ayrshire. This was 2% lower than in

2008, compared with growth of 2% across Scotland as a whole. The majority of this decline

was concentrated in North Ayrshire, which had 200 fewer businesses in 2013 than in 2008.

Table 2-5: Number of registered businesses 2008-2013

Change 2008-2013

2008 2013 Number %

East Ayrshire 3,900 3,800 0 -1%

North Ayrshire 4,100 3,900 -200 -4%

South Ayrshire 4,200 4,100 -100 -2%

Ayrshire 12,200 11,900 -300 -2%

Scotland 195,300 198,300 3,000 2%

UK 2,643,200 2,625,00 -17,700 -1%

Source: ONS, UK Business Activity, Size and Location All figures have been rounded to 100 and calculations have been carried out on the unrounded figures

1 Full-time workers are defined as those who work more than 30 paid hours per week or those in teaching professions working 25 paid hours or more per week.


7

The profile of businesses is also skewed toward lower added value with more operating in retail and tourism-related sectors and fewer in professional, scientific & technical firms, relative to Scotland.

2.12 Retail companies account for the highest share of registered businesses in Ayrshire. This is a

particularly broad category, ranging from specialist stores right through to supermarkets and

wholesalers.

2.13 Table 2-6 shows that relative to Scotland (15%) as a whole, Ayrshire (10%) has fewer

professional, scientific and technical firms. In East Ayrshire alone, only 8% of all firms operate

in this sector. In contrast to this, Ayrshire has higher concentrations of firms in retail,

accommodation & food, and arts, entertainment & other services.

Table 2-6: Businesses by sector 2013

Ayrshire Scotland

Agriculture, forestry & fishing 9% 9%

Production 6% 5%

Construction 9% 9%

Motor trades 3% 3%

Wholesale 4% 4%

Retail 13% 12%

Transport & storage 3% 3%

Accommodation & food services 9% 8%

Information & communication 3% 4%

Finance & insurance 2% 2%

Property 2% 3%

Professional, scientific & technical 10% 15%

Business admin & support 8% 6%

Public admin & defence 2% 2%

Education 3% 3%

Health 7% 6%

Arts, entertainment & other services 9% 7%

Source: ONS, UK Business Activity, Size and Location

Micro businesses employing less than 10 people comprise the majority of companies in both Ayrshire and Scotland. The remainder are mainly SMEs with no more than 50 employees.

2.14 Approximately four in every five registered businesses in both Ayrshire and Scotland are

micro firms employing less than 10 people. An additional 16% are SMEs with 10-49

employees and a relatively small proportion (


8

Figure 2-3: Businesses by Size-band 2013

Source: ONS, UK Business Activity

Base: 11,900 Ayrshire; 198,300 Scotland

Although the business birth rate in Ayrshire has increased in recent years, it has remained consistently below the national average since 2005.

2.15 There were 31 new business registrations in Ayrshire per 10,000 residents in 2013, an

increase of 26% on 2012. This reflects the notable upturn in the birth rate across all areas

since 2009. An increase in the business start-up rate is common during times of recession as

people look for alternative ways to earn a living in the face of declining job opportunities.

2.16 Despite this growth in the number of new business registrations, Ayrshire was still well below

the equivalent rates of 40 and 54 per 10,000 for Scotland and the UK. Figure 2-4 shows that

since 2005, the new business birth rate in Ayrshire has been consistently below the national

averages.

81% 80%

16% 16%3% 3%

0.3% 0.5%

Ayrshire Scotland

% o

f all

bu

sin

esses

0-9 employees 10-49 employees 50-249 employees 250+ employees


9

Figure 2-4: Business birth rates per 10,000 population 2005-2013

Source: ONS, UK Business, Size and Location; SQW Calculations

Business expenditure on R&D in Ayrshire is below the national average, with expenditure particularly low in East and North Ayrshire.

2.17 Private sector investment in research and development is widely considered to be a key driver

of economic growth, productivity and competitiveness.

2.18 The Scottish government publish annual statistics on Business Enterprise Research and

Development (BERD) expenditure. In 2013, BERD expenditure in Scotland was £798m – 4.3%

of the UK total of £18.4bn and 0.6% of national GDP. This level of expenditure marks an

increase of 10.5% in real terms on 2012 figures. UK expenditure increased by 5.7% in real

terms over this period.

2.19 Figure 2-5 outlines the relative performance of regions within Scotland, highlighting that in

2013;

BERD expenditure per head of population in Scotland was just over half of that of the

UK

The highest level of BERD per head of all Scottish regions was recorded in Edinburgh

and the Lothians

Aberdeen City & Shire also performs reasonably well with spend per head above the

Scottish average

Ayrshire had the lowest level of BERD per head of all Scottish regions, amounting to

just 20% of the Scottish average and 10% of the UK average.

0

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011 2012 2013

Bu

sin

ess b

irth

s p

er

10,0

00 p

op

ula

tio

n

Ayrshire Scotland UK


10

Figure 2-5: Business Enterprise Research & Development (BERD) expenditure per head of population 2013

Source: Scottish Government; SQW Calculations

2.20 These variations in the levels of business expenditure on R&D can be attributed to the

industrial structure and nature of companies operating within each of these regions. The high

levels of spend per head in Edinburgh & the Lothians is the result of particularly high levels of

R&D investment by manufacturing companies based in both Edinburgh and West Lothian. In

Edinburgh alone, 63.8% of R&D spend was undertaken in manufacturing2.

2.21 Aberdeen City & Shire is the only other region with levels of business expenditure on R&D

above the Scottish average. In contrast to Edinburgh & the Lothians, the majority of this comes

from firms operating in the service sector.

2.22 The areas with the lowest levels of spend per head on R&D are the predominantly more rural

areas of Ayrshire, South of Scotland and Forth Valley. Such regions are less likely to be home

to national or international company headquarters when compared to Edinburgh and

Aberdeen City & Shire. Table 2-7 breaks down Ayrshire by its local authority areas, showing

that BERD expenditure varies greatly throughout the region.

Table 2-7: Business Enterprise Research & Development (BERD) expenditure per head of population in Ayrshire 2013

BERD Expenditure per head of population % of Scottish Average

East Ayrshire £10 7%

North Ayrshire £23 15%

South Ayrshire £60 40%

Source: Scottish Government; SQW Calculations

2 Scottish Government (2013), Business Enterprise Research and Development, available from http://www.gov.scot/Resource/0046/00466415.pdf

£30

£39

£45

£74

£92

£110

£129

£150

£201

£287

£389

Ayrshire

Forth Valley

South of Scotland

Fife

Tayside

Highlands & Islands

Glasgow & Clyde Valley

Scotland

Aberdeen City & Shire

UK

Edinburgh & the Lothians

BERD Expenditure per head of population 2013


11

3. People and Profile of the Workforce

Introduction

This section looks at people and the profile of the existing workforce in Ayrshire covering:

Population

Labour market participation

Total employment

Industrial structure

Occupational profile.

Population

Population growth in East, North and South Ayrshire has lagged well behind Scotland over the past decade.

3.1 There were 372,200 people living in Ayrshire in 2013, an increase of 1% on 2003. The

equivalent population growth rate for Scotland was much higher at 5%.

3.2 Table 3-1 shows that, over the same period, East Ayrshire experienced the fastest rate of

population growth at 2%. South Ayrshire saw an increase of 1% whilst North Ayrshire

experienced a small increase of 600 people living in the area.

Table 3-1: Total Population

Change 2003-2013

2003 2013 Number %

East Ayrshire 119,900 122,400 2,500 2%

North Ayrshire 136,300 136,900 600 0%

South Ayrshire 111,600 112,900 1,300 1%

Ayrshire 367,800 372,200 4,400 1%

Scotland 5,068,500 5,327,700 259,200 5%

Source: General Register Office for Scotland; Office for National Statistics

3.3 Figure 3-1 shows that population growth over the past decade has not been evenly spread

across all age groups.


12

Figure 3-1: Population change by age band 2003-2013

Source: General Register Office for Scotland; Mid-Year Population Estimates

Ayrshire has an ageing population relative to Scotland as a whole with a greater proportion of residents at or above retirement age.

3.4 Figure 3-2 shows that Ayrshire is home to fewer adults between the age of 20 and 30 in

comparison to Scotland as a whole. In contrast, the region has a relatively higher share of

residents over the age of 50 and above retirement age.

3.5 This population profile points to the net out-migration of young adults (early to mid-20s) and

an inflow of adults at or close to retirement age.

-9%

-3%

9%

-7%

-19%

13%

8%

19%

-3%-2%

12%

6%

-13%

17%

13%

16%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0-14 15-19 20-24 25-34 35-44 45-54 55-64 65+

% c

han

ge 2

003-2

013

Age Band

Ayrshire

Scotland


13

Figure 3-2: Age profile of the population 2013

Source: General Register Office for Scotland

The population in Ayrshire is also expected to decline over the coming decade, with the majority of this decline concentrated in North Ayrshire.

3.6 Ayrshire’s total population is expected to reach 369,900 by 2023, a decrease of 1% from 2013.

Over the same period, Scotland is projected to grow by 4%. Table 3-2 shows that the estimated

change in population is mixed across the local authorities with a projected 2% decline in North

Ayrshire and relatively little change in both East and South Ayrshire.

Table 3-2: Population Projection 2013-2023

Change 2013-2023

2013 2023 Number %

East Ayrshire 122,700 123,600 900 1%

North Ayrshire 137,100 133,900 -3,200 -2%

South Ayrshire 112,800 112,400 -400 0%

Ayrshire 372,600 369,900 -2,700 -1%

Scotland 5,327,900 5,541,800 213,900 4%


Ayrshire has an ageing population and this is only expected to increase as time progresses.

3.7 In the next decade, the only population increases in Ayrshire are expected to be amongst those

over the age of 50. Growth in those over the age of 75 is projected to be more pronounced in

Ayrshire (33%) than across Scotland as a whole (28%).

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90+

% o

f to

tal

po

pu

lati

on

in

201

3

Age

Ayrshire

Scotland


14

3.8 Elsewhere, a decrease is expected for all age groups under 50. Of particular note is the

projected decline of 16% in the working age group of 30-49 which is four times the rate of

decline expected for this group across Scotland as whole.

Figure 3-3: Projected Population Change by Age 2012-2022


Labour Market Participation

The employment rate is below the national average in East, North and South Ayrshire.

3.9 In 2014, there were 162,000 Ayrshire residents in work, accounting for 70% of the working

age population. This was below the equivalent rate for both Scotland (73%) and the UK (72%).

The employment rate for each local authority within the region is below the national average.

East Ayrshire has the lowest employment rate at 69%.

Table 3-3: Resident Employment 2014

Total Rate

East Ayrshire 53,800 69%

North Ayrshire 59,500 71%

South Ayrshire 48,700 72%

Ayrshire 162,000 70%

Scotland 2,478,500 73%

UK 29,352,100 72%

Source: Annual Population Survey

-2%

-9%

-16%

5%

12%

33%

4%

-7%-4%

9%

16%

28%

0-15 16-29 30-49 50-64 65-74 75+

% P

roje

cte

d c

han

ge 2

012-2

022

Age Band

Ayrshire

Scotland


15

Ayrshire was hit badly by the recession but the employment rate has increased steadily since 2012.

3.10 Figure 3-4 shows that, prior to the beginning of the recession in 2008, the Ayrshire

employment rate was below national averages but had been increasing. It then fell sharply

between 2008 and 2011 taking it to a level considerably below both the Scottish and UK

averages. Since then, the employment rate seems to have recovered, reversing the downward

trend.

Figure 3-4: Employment Rate 2005-2014


Ayrshire is also a home for a significant number of commuters. According to Census data, Ayrshire has a net outflow of almost 20,000 residents mostly into Glasgow.

3.11 It is worth noting that the Ayrshire labour market is not self-contained. Many residents in

employment travel outside the area to their place of work. Similarly, many of the jobs located

in the region are taken by people living outside the area. Table 3-4 shows the inward and

outward commuting patterns for each local authority in Ayrshire as obtained from the 2011

Census. This highlights there is a net outflow of almost 20,000 residents in Ayrshire, with

more people leaving both East Ayrshire and North Ayrshire for work than coming in. South

Ayrshire is the only local authority with a positive influx of workers.

Table 3-4: Commuting patterns in Ayrshire

Inward Outward Net

East Ayrshire 11,089 20,393 -9,304

North Ayrshire 9,808 21,345 -11,537

South Ayrshire 13,813 12,731 1,082

Ayrshire 34,710 54,469 -19,759

Source: 2011 Census

58%

60%

62%

64%

66%

68%

70%

72%

74%

76%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Em

plo

ym

en

t R

ate

(%

)

Ayrshire

Scotland

UK


16

3.12 Figure 3-5 captures the balance between outgoing residents and inbound commuters. Eighty

two percent of the resident population in Ayrshire work within the region. For the remaining

residents, Glasgow is the most common alternative with 8% of residents out-commuting to

this regional area.

Figure 3-5: Commuting Flows

Source: Produced by SQW (2015); Licence Number 100030994.

Contains Ordnance Survey data © Crown Copyright and database rights (2013)

3.13 Table 3-5 shows that in terms of absolute numbers, the amount of Ayrshire residents that

commute to Glasgow for work increased by 22% between 2001 and 2011. Out-commuting to

South Lanarkshire and East Renfrewshire also increased, rising by 35% and 29% respectively.

Whilst the number of residents commuting to Renfrewshire (17%) and North Lanarkshire

(15%) rose, Inverclyde experienced a fall in the number of Ayrshire residents travelling in for

work – declining by 20%. The available data fails to provide an occupational breakdown of

these commuting patterns, identifying a need for additional research in this area.


17

Table 3-5: Out-commuting from Ayrshire (absolute numbers)

Change 2001-2011

2001 2011 Number %

Glasgow City 11,051 13,478 2,427 22%

Renfrewshire 4,741 5,536 795 17%

Inverclyde 2,025 1,613 -412 -20%

South Lanarkshire 1,619 2,179 560 35%

North Lanarkshire 837 965 128 15%

East Renfrewshire 716 924 208 29%

Source: 2001 and 2011 Census

Over 7,000 people in Ayrshire changed their address with Glasgow and Renfrewshire the most frequent choices.

3.14 According to the 2011 census, 7,606 people in Ayrshire changed their address. Of this figure,

63% moved to another address outside the region. Table 3-6 shows the top ten most popular

destination for residents leaving Ayrshire:

Table 3-6: Migrant Destinations

Change of Address: Ayrshire

Number %

Glasgow City 1629 21%

Renfrewshire 377 5%

City of Edinburgh 314 4%

Dumfries and Galloway 297 4%

South Lanarkshire 288 4%

Aberdeen City 176 2%

Fife 170 2%

Stirling 154 2%

Inverclyde 145 2%

North Lanarkshire 137 2%

Source: 2011 Census

Approximately 15,000 Ayrshire residents were unemployed in 2014 with the highest concentration in East Ayrshire.

3.15 The definition of unemployment is internationally agreed and recommended by the

International Labour Organisation (ILO), an agency of the United Nations. It covers those of

working age who are out of work, want to work and are actively seeking to start work. The

ILO unemployment rate is the percentage of the economically active population who are

unemployed on this measure.

3.16 In 2014, a total of 14,900 Ayrshire residents of working age were unemployed and actively

seeking work. This represented 11% of the economically active population, higher than the


18

corresponding rate of 6% for Scotland. As before, there are considerable variations within the

region on this measure with East Ayrshire having the highest unemployment rate at 11%.

Table 3-7: ILO Unemployment 2014

Total Rate

East Ayrshire 6,400 11%

North Ayrshire 4,600 7%

South Ayrshire 3,900 8%

Ayrshire 14,900 8%

Scotland 166,900 6%

UK 2,002,800 6%


3.17 In 2007, the unemployment rate in Ayrshire was around 1% above the national average.

However, it rose sharply between 2008 and 2012 taking it to a level almost 4 percentage

points above national averages. After a period of stabilisation, unemployment in Ayrshire fell

from 12% in 2013 to 8% in 2014.

Figure 3-6: ILO Unemployment Rate 2005-2014


Qualifications and Attainment

Since 2007/08, more school leavers have decided to stay in education rather than enter an uncertain labour market.

3.18 Figure 3-7 shows that the proportion of school leavers in Ayrshire entering both higher and

further education has increased since 2007/08. This has resulted in a decline in the

proportion of school leavers entering unemployment, falling from 12% to 6%.

0%

2%

4%

6%

8%

10%

12%

14%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ILO

Un

em

plo

ym

en

t R

ate

(%

)

Ayrshire

Scotland

UK


19

Figure 3-7: School leaver destinations in Ayrshire 2007/08-2013/14

Source: Scottish Government School Leaver Destination Survey

School leavers in Ayrshire tend to enter further education and are less likely to go into higher education than across the rest of Scotland.

3.19 Figure 3-8 outlines that the share of school leavers in Ayrshire entering employment is below

the national average. In contrast, a higher proportion of school leavers in the region entered

further education during this year. The share of those that entered unemployment was slightly

below Scotland as a whole.

Figure 3-8: School leaver destinations 2013/14

Source: Scottish Government School Leaver Destination Survey

2%

6%

18%

33%

38%

6%

12%

19%

31%

29%

Training

Unemployment

Employment

FurtherEducation

HigherEducation

% of all School Leavers

2007/08

2013/14

11%

25%

5%

25%

31%

12%

19%

6%

31%

29%

Unemployment

Employment

Training

FurtherEducation

HigherEducation

% of all school leavers

Ayrshire

Scotland


20

Ayrshire residents of working age are less likely to have higher level qualifications compared to Scotland as a whole.

3.20 The Scottish Credit Qualification Framework (SCQF) is the national credit transfer system for

all levels of qualifications in Scotland. The proportion of working of Ayrshire residents

educated to SCQF 7-12 is seven percentage points below the national average. A slightly

higher share of residents aged 16-64 have mid-level qualifications than across Scotland.

Similarly, a greater proportion of residents have no qualifications compared to Scotland as a

whole.

Figure 3-9: Qualification profile of the working age population (16-64) 2014


Total Employment

Consistent with the GVA analysis, there were just over 6,000 fewer jobs in Ayrshire in 2013 than in 2009. The fall in employment is mainly concentrated in East Ayrshire.

3.21 There were 123,200 people working in Ayrshire in 2013. This was 5% lower than in 2009,

greater than the equivalent decline of 2% across Scotland as a whole.

3.22 The fall in employment within the region has been mainly concentrated in East Ayrshire.

There were 3,000 fewer people working in East Ayrshire in 2013 than in 2009, representing

a decline of 7%. South Ayrshire also suffered a net decline in employment during this period,

falling by 5%. It is important to note that the actual number of jobs lost in this area were much

lower at 2,300. The decline of 2% in North Ayrshire was in keeping with the national trend.

8% 6%

6% 6%

10% 9%

16%14%

20%19%

39%46%

Ayrshire Scotland

Wo

rkin

g A

ge P

op

ula

tio

n (

%)

SCQF 7-12

SCQF 6

SCQF 5

SCQF 1-4

OtherQualifications

NoQualifications


21

Table 3-8: Total employment 2009-2013

Change 2009-2013

2009 2013 Number %

East Ayrshire 40,900 37,900 -3,000 -7%

North Ayrshire 40,300 39,300 -1,000 -2%

South Ayrshire 48,300 46,000 -2,300 -5%

Ayrshire 129,500 123,200 -6,300 -5%

Scotland 2,523,100 2,470,400 -52,700 -2%

Source: Business Register and Employment Survey Figures are workplace rather than resident-based

Industrial Structure

Ayrshire has above average concentrations of employment in health, retail and manufacturing but is under-represented in professional service sectors.

3.23 The largest employing industries in Ayrshire are health, retail and manufacturing. Table 3-9

shows that the region has above average concentrations of employment in each of these

sectors relative to Scotland as a whole.

3.24 In contrast, Ayrshire has below average shares of employment in information and

communication, professional and financial services than nationally. Underlying this is the fact

that such industries tend to be concentrated in large cities and more urban areas.

Table 3-9: Employment by Broad Industry Sector 2013

Ayrshire Scotland

Total % Total %

Agriculture, forestry and fishing 500 0% 77,800 3%

Mining, quarrying and utilities 2,700 2% 63,000 3%

Manufacturing 11,800 10% 176,300 7%

Construction 6,900 6% 137,500 6%

Motor trades 2,800 2% 46,900 2%

Wholesale 3,300 3% 71,600 3%

Retail 15,400 13% 241,000 10%

Transport and storage 5,300 4% 98,300 4%

Accommodation and food services 11,500 9% 191,700 8%

Information and communication 1,000 1% 62,500 3%

Financial services 1,500 1% 85,700 3%

Property 1,300 1% 34,200 1%

Professional, scientific and technical 5,300 4% 170,300 7%

Business services 6,800 6% 182,400 7%

Public admin and defence 6,400 5% 143,300 6%


22

Ayrshire Scotland

Education 8,600 7% 187,400 8%

Health 24,800 20% 383,400 16%

Arts, entertainment and other services 7,300 6% 117,100 5%

Total 123,200 100% 2,470,400 100%

Source: Business Register and Employment Survey

Health, retail and tourism-related industries dominate the top 20 employing industries in Ayrshire.

3.25 Official employment estimates can be separated into 616 distinct sub-sectors based on

Standard Industrial Classification (SIC) codes. This type of analysis makes it possible to look

at the industrial structure of an area in a greater level of detail than the broad categories

covered in the previous section.

3.26 Figure 3-10 captures the top 20 employing industries in Ayrshire. In 2013, just under half

(46%) of the workforce in the region were employed in these industries. This employment

was concentrated in the following sectors:

Hospital activities – hospitals are the largest employer in the region and the source

of 6,800 jobs in 2013. Around 70% of these jobs were concentrated in East Ayrshire,

home to several hospitals including East Ayrshire Community Hospital and University

Hospital Crosshouse. A range of other health and social work activities also feature

within the top 20 employing industries.

Retail – supermarkets (retail of food, drinks, tobacco etc.) represent the second

largest employers in the region and the source of around 6,400 jobs. These jobs are

spread relatively evenly between East Ayrshire (28%), North Ayrshire (34%) and

South Ayrshire (38%).

Tourism and hospitality – restaurants, bars and hotels present considerable job

opportunities in Ayrshire, accounting for almost 12,000 jobs when combined.

Repair and maintenance of aircraft – features in the top 20 due to the presence of

Prestwick airport in South Ayrshire. In addition to commercial flight operations, the

airport serves as a hub for aircraft maintenance. This provides 1,700 jobs in the

region, all of which are concentrated in South Ayrshire.


23

Figure 3-10: Top 20 Employing Industries in Ayrshire 2013


Importance of the aerospace sector

3.27 A review of the Aerospace sector in Ayrshire is currently being carried out and this section is

included only to provide some of the key statistics. Aircraft repair and maintenance is only

specific part of the cluster of aerospace activity around Prestwick Airport. However, it is

useful to consider how it has fared over time and relative to Scotland as a whole. Between

2009 and 2013, the number of people employed within this industry in South Ayrshire more

than doubled to 1,700 (77% of the Scottish total). Along with Renfrewshire and South

Lanarkshire, South Ayrshire is one of the most important areas in terms of aircraft repair and

maintenance.

3.28 The Prestwick Airport location (covering a number of sites and premises) includes a much

wider range of businesses with varying levels of connection to the aerospace sector. Together

this employs over 3,000 people directly. It includes airport related activities, aerospace and

engineering fabrication manufacturers, aerospace related service and design companies.

With the inclusion of developments immediately adjoining the Airport site, such as Prestwick

Aerospace Park, total employment is over 4,500.

1,150

1,200

1,300

1,500

1,500

1,600

1,700

1,750

1,800

1,900

2,450

3,050

3,550

3,600

3,650

4,050

4,050

4,150

6,400

6,800

General medical practice

Sale of cars

Call centres

Other residential care activities

Residential nusing care activities

Retail sale of clothing

Repair & maintenance of aircraft

Beverage serving activites

Construction of buildings

General cleaning of buildings

General secondary education

Other social work (without accomm)

General public admin

Hotels & similar accommodation

Primary education

Other human health activities

Social work (without accomm)

Restaurants

Retail of food, drinks, tobacco etc.

Hospital activites


24

Figure 3-11: Employment in the repair and maintenance of aircraft industry 2009-2013


Occupational Profile

Ayrshire residents are more likely to be employed in caring, service and elementary occupations and less likely to work in professional occupations in comparison to Scotland as a whole.

3.29 A higher share of Ayrshire residents are employed in caring, service and elementary

occupations than nationally. In contrast, Ayrshire residents are less likely to be employed in

professional occupations relative to Scotland as a whole.

3.30 This occupational profile is largely reflective of the region’s industrial structure with

manufacturing, retail and public service sectors dominating and lower representation in

professional service sectors.

0

500

1000

1500

2000

2500

3000

3500

2009 2010 2011 2012 2013

No

of

Em

plo

ye

es

South Ayrshire

Scotland


25

Table 3-10: Employment by Occupation 2014

Ayrshire Scotland

Total % Total %

Managers & Senior Officials 14,300 9% 224,400 9%

Professionals 25,500 15% 503,400 20%

Associate Professional & Technical 20,900 12% 325,700 13%

Administrative & Secretarial 16,600 10% 273,000 11%

Skilled Trades 19,600 12% 295,900 12%

Caring, Leisure & Other Services 22,000 13% 246,700 10%

Sales & Customer Services 14,500 9% 225,600 9%

Operatives 10,100 6% 159,100 6%

Elementary Occupations 22,900 14% 292,300 11%



26

4. Travel and Tourism

Introduction

4.1 This section looks at travel and tourism figures for Ayrshire and the surrounding areas

covering:

Passenger and cargo movements at Prestwick airport

Overnight tourism

Domestic day visits

Prestwick Airport

In the last decade, passenger numbers and freight tonnage has fallen substantially at Prestwick airport.

4.2 South Ayrshire is home to Prestwick airport, facilitating commercial flight operations and

serving as a hub for aircraft maintenance. Although Prestwick Airport is Scotland’s largest

airfield in physical terms, it lags behind Edinburgh, Glasgow and Aberdeen in terms of

passenger numbers.

4.3 Table 4-1 shows that there were 1.25m fewer passengers passing through Prestwick airport

in 2014 than in 2004 – a decline of 58%. Over the same period, passenger numbers at Glasgow

airport also fell, albeit at a lesser rate of 10%. Both Aberdeen and Edinburgh airport

experienced significant increases in passenger numbers of 41% and 27% respectively. This

comparative difference in passenger numbers stems from the sharp reduction in destination

routes offered by the airport.

4.4 In 2011, Prestwick airport lost both its Heathrow and Stansted routes, and ownership of the

airport was taken on by the Scottish Government. According to Civil Aviation Authority (CAA)

data, the only remaining reporting domestic airports with routes to and from Prestwick in

2014 were the City of Derry (Eglinton) and Liverpool (John Lennon) airport.

4.5 The number of international routes and destinations offered by Prestwick airport has also

fallen in recent years. Between 2008 and 2014, the number of international routes in

operation fell from 59 to 36 – a decline of 39%. Routes to Stockholm, Reykjavik, and central

European cities, Amsterdam and Budapest were also lost. To some extent this has been offset

with more low-budget flights to Spanish and Polish destinations.

4.6 This pattern looks set to continue with the airport’s only commercial carrier (Ryanair)

recently announcing the transfer of five flights to its new Glasgow base3.

3The Scotsman (2015), available from http://www.scotsman.com/news/transport/prestwick-fears-after-ryanair-flights-lost-1-3465359


27

Table 4-1: Terminal Passengers 2004-2014

Change 2004-2014

2004 2014 Number %

Aberdeen Airport 2,633,800 3,723,400 1,089,600 41%

Edinburgh Airport 7,992,500 10,158,900 2,166,400 27%

Glasgow Airport 8,557,100 7,708,900 -848,200 -10%

Prestwick Airport 2,159,000 912,400 -1,246,600 -58%

Source: Civil Aviation Authority

4.7 In the last decade, Prestwick airport has suffered a significant decline in its handling of freight

cargo, falling by 63%. Again this reflects the considerable reduction in flight routes offered by

the airport. Whilst Edinburgh airport also experienced a decline (29%), the amount of cargo

passing through Aberdeen and Glasgow airport soared. Of particular note is the 90% increase

witnessed in Glasgow airport.

Table 4-2: Freight Cargo (tonnes) 2004-2014

Change 2004-2014

2004 2014 Number %

Aberdeen Airport 3,800 6,300 2,500 67%

Edinburgh Airport 27,400 19,400 -8,000 -29%

Glasgow Airport 8,100 15,400 7,300 90%

Prestwick Airport

34,100 12,500 -21,600 -63%

Source: Civil Aviation Authority

Tourism

The total number of tourist trips (domestic and international) and expenditure in Ayrshire

declined between 2009 and 2013, in contrast to the overall growth in Scotland.

4.8 Overall, the number of tourist trips and expenditure has declined slightly from 2009 to 2013.

However, this is also against a background of Scottish tourism growth over the period. Figure

4-1 shows the pattern of domestic and overseas tourism, along with a three year average in

real prices (excluding inflation).

4.9 Tourism numbers and expenditure rose slightly from 2009 to 2011, but have fallen back in

the last couple of years. The green line shows how, after removing inflation the fall in the

value of tourist expenditure is slightly more significant.


28

Figure 4-1: Tourism expenditure in Ayrshire and Arran (2008 -2012)

There has been a marked fall in the number of international visitors to the region, particularly since 2010, at a time when visits to Scotland has been rising.

4.10 The International Passenger Survey (IPS) collects information about passengers entering the

UK. Table 4-3 shows that over the last decade, the number of inbound international visitors

to Ayrshire and Arran has fallen by 20%. In contrast to this, the number of international

visitors to Scotland increased by 44% over the same time period.

Table 4-3: International Visits to Ayrshire and Arran 2004-2014

Change 2004-2014

2004 2014 Number %

Ayrshire and Arran 80,000 64,000 16,000 -20%

Scotland 1,880,000 2,700,000 820,000 44%

Source: International Passenger Survey

4.11 Figure 4-2 shows an index of the inbound expenditure growth rate from 2006 to 2014 using

three year averages. Prior to the recession, the growth of inbound tourism expenditure in

Ayrshire was slightly stronger relative to Scotland as a whole. However, since 2010, there has

been a reversal of that trend with the value of international tourism to Ayrshire and Arran

having fallen steeply, while the value to Scotland has grown.

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013

£ m

illi

on

s

Domestic Overseas Three averages (Real 2014 prices)


29

Using three year averages, between 2010 and 2014, the value of international tourism in Ayrshire and Arran fell by 23% compared with growth of 21% in Scotland.

Figure 4-2: Ayrshire and Scotland Expenditure Growth 2006-2014 (using three year averages)

Source: International Passenger Survey

Day Visits

Although the number of day visits to Ayrshire has increased, the level of expenditure on these visits has dropped off in the last year.

4.12 The GB Day Visit Survey provides estimates of the number of day visits broken down by local

authority area. However, the small sample size of each survey means that results are only

presented as single figures, two and three year averages. The survey has only been carried out

in its current form since 2011, making any trends hard to identify.

4.13 Table 4-4 captures the number of visits for each local authority within Ayrshire. This suggests

that from 2011, the number of day visits rose sharply in 2012 and continued to increase in

2013. Of the three local authorities in the region, North Ayrshire was the only area to mirror

this incremental increase, with the number of visits to East and South Ayrshire declining

between 2012 and 2013.

Table 4-4: GB Day Visits Survey- Visits to Ayrshire

Visits (millions)

2011 2011-2012 2011-2013

East Ayrshire 1.87 1.83 1.9

North Ayrshire 2.74 2.8 2.93

South Ayrshire 3.91 5.03 5

Ayrshire 8.52 9.66 9.83

Source: GB Day Visits Survey

40

50

60

70

80

90

100

110

120

130

140

2006 2007 2008 2009 2010 2011 2012 2013 2014

Ind

ex o

f T

ou

rism

Exp

en

dit

ure

Gro

wth

2006 =

100

Ayrshire and Arran

Scotland


30

4.14 As well as providing the number of day visits, the GB Day Visit Survey also captures the value

of these visits to each local authority. Table 4-5 shows that from 2011, the value of trips rose

sharply in 2012 and then fell again in 2013, although still remained above 2011 levels. East

Ayrshire was the only local authority not to reflect this trend, noting a year-on-year fall in the

value of day visit expenditure.

Table 4-5: GB Day Visits Survey – Expenditure in Ayrshire

Expenditure (£m)

2011 2011-2012 2011-2013

East Ayrshire £51.31 £50.96 £45.05

North Ayrshire £62.32 £92.02 £86.72

South Ayrshire £135.58 £150.54 £141.58

Ayrshire £249.21 £293.52 £273.35

Source: GB Day Visits Survey

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