SCOTLAND’S geographical share of North Sea oil revenues was negative for the first calendar year on record in 2016, Scottish Government figures show.
The latest quarterly national accounts reveal the amount received in tax receipts fell to minus £338 million over the 12-month period.
When a geographical share of UK offshore and overseas economic activity is included, Scottish gross domestic product (GDP) is estimated at £159 billion during the year, or £29,554 per person, amounting to growth of 1.7 per cent.
Growth in onshore GDP was mostly driven by consumer spending, with positive contributions also made by government, capital investment and exports. However, a widening of the onshore trade deficit due to the increasing value of imports had a negative impact.
Economy Secretary Keith Brown said the latest statistics “highlight the challenges facing the Scottish economy” and that “current headwinds relating to the oil and gas sector and Brexit uncertainty are continuing to weigh on growth”.
“Despite this, recent business survey evidence shows positive signals for manufacturing and other sectors whilst Scotland’s onshore output per head continues to be higher than the UK average excluding London. This demonstrates that our economic fundamentals remain strong.
“The Scottish Government is taking action to support the labour market, particularly surrounding the oil and gas sector.
“Whilst the statistics also show that recent growth was mostly driven by consumer spending, we are doing all we can to support growth across the wider economy through initiatives such as our £500m Scottish Growth Scheme to stimulate investment in new and early-stage businesses, and investing in our £6bn infrastructure plan.”
Analysis by economist John McLaren said the decline in North Sea revenues contrasted with a period of relative stability between 2005-2012 when Scottish offshore oil revenues did not fall below £6bn in any single year.
McLaren said: “The latest national accounts data shows that 2016 was a disappointing year for the Scottish economy. Much of this was connected to a further decline in the contribution of the North Sea.
“Furthermore, the Scottish trade balance for 2016 has worsened by £1.6bn from 2015 and the savings ratio is at a record low. As a result, worries persist over the economy’s future growth potential and over the self-financed element of the Scottish budget.”
The Scottish Tories said the figures were “disappointing” but said the “burden” would be shared across the whole UK and Labour said they were a real concern.
The quarterly national accounts announced by Scotland’s chief statistician also revealed that manufactured exports, which make up around half of the total value of exports from Scotland to the rest of the world , excluding oil and gas, fell by 2.3 per cent in volume terms during the fourth quarter of 2016. Comparing the most recent four quarters to the previous four quarters, the volume of manufactured exports fell by 5.3 per cent.
Over the the year to 2016, total consumer spending is estimated to have increased by 2.9 per cent in current prices – unadjusted for inflation, not real terms. Gross disposable household income (GDHI) is estimated to have increased by 1.6 per cent over the year to 2016.
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