Local output and value-added indicate the health of the economy as a producer of goods and services. We examine:

• Gross Value Added
• Service output
• Manufacturing output

Gross Value Added

Gross Value Added (GVA) measures the contribution to the economy of each producer, sector or industry in the local economy. It allows us to assess the importance of each sector to the overall Dumfries and Galloway economy. Figure 0 2 shows that the overall GVA in Dumfries and Galloway declined from its peak of £1.04 Billion in 2001 to £919 Million in 2002, due to the impact of Foot and Mouth. It also shows that the service sector contributes most wealth to the local economy, accounting for more than half of the local GVA (53%). And although manufacturing employment has declined, in terms of GVA, it still contributes more than a third of the total (35%). The role of construction has become more significant, with construction GVA almost doubling in volume between 1998 and 2002, and increasing from 8% to 12% of the total.

Figure 0 2 Gross Value Added by Industry Sector 1998 - 2002

Source: ONS Scottish Annual Business Statistics, 2004

As Figure 0 3 shows, all sectors of the Dumfries and Galloway economy have shown growth in terms of GVA between 1998 and 2002. Manufacturing GVA has increased by 11% in contrast to an 8% decline nationally, whilst construction GVA has grown at three times the Scottish rate. Only the service sector shows a broadly similar pattern to the Scottish growth rate over this period.

Figure 0 3 Change in GVA by sector 1998 - 2002

Source: ONS Scottish Annual Business Statistics

Across the South of Scotland there has been only a very slight increase in manufacturing GVA. However the South of Scotland has seen higher growth in both the service and construction sectors, with construction GVA growing at almost four times the Scottish rate.

However if we look at GVA per capita as shown in Figure 0 4 it is clear that the Dumfries and Galloway and South of Scotland lag some way behind the national situation. The Dumfries and Galloway per capita GVA was just 64% of the Scottish figure in 1998, peaking in 2001 when it reached 82% of the Scottish level, but then declining to 70% in 2002. The South of Scotland figures show a similar trend, with a slightly lower figure in 2002 representing 69% of the Scottish level (£6,101).

Figure 0 4 Gross Value Added per capita 1998 - 2002

Source: calculated from Scottish Business Statistics, Scottish Executive and GRO (S) Mid-year population estimates 2004

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Service sector output

The service sector is the biggest part of the local economy and comprises a range of sub-sectors and activities. Figure 0 5 below shows that the biggest sub-sector in terms of output is transport, storage & communication which accounts for just over a quarter of service sector output (28%). Real estate, renting & business activities and retail & repair account for over a third at 34% of output.

Figure 0 5 Service Sector Output by Sector (2002)

Source: Scottish Executive, Scottish Annual Business Statistics

It is also useful to look at how output within these sub-sectors has changed over recent years. Figure 0 6 clearly shows that the main area of growth has been in other community, social and personal. This sector includes a range of consumer services including hairdressing, dry-cleaning, arts and entertainment and physical well-being activities such as gyms, health spas and beauticians.

In contrast there has been more modest growth in hotels and restaurants, transport, storage & communication, and a decline in the output in the education, health & social work sector.

Figure 0 6 Change in output by sub-sector 1998-2002

Source: Scottish Executive, Scottish Annual Business Statistics

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Manufacturing output

The manufacturing sector is made up a range of different sub-sectors, and Figure 0 7 shows the contribution of these sub-sectors in terms of economic output. The food and drink sector is the most significant accounting for 38% of the Dumfries and Galloway manufacturing output. The next biggest sector in terms of output includes wood, pulp, and paper and rubber products, making up 37% of manufacturing output.

Figure 0 7 Manufacturing Output by Sector (2002)

Source: ONS Scottish Annual Business Statistics

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