An economic analysis of water use in the Scotland river basin district

Figure 1 below shows the recent trends in Scottish gross domestic product (GDP) which measures the total output of goods and services in the economy. This information is presented as an index which is adjusted for inflation and allows direct comparisons between sectors. Although Scotland’s output has grown over the period (1998–2004) the performance of different sectors varies considerably. The production industries show the declining relative contribution of manufacturing and the rising prominence of the service sector. The cyclical nature of the construction sector can be clearly seen and, of course, underlying these broad sectors lies the fluctuating fortunes of individual companies in each sub-sector.

Monetary values of GDP are difficult to produce accurately for UK regions (such as Scotland) and, therefore, are often dated. The latest available breakdown is for 2001 when Scottish GDP was just over £69.623 billion. Official estimates of sub-regional GDP are not available and it is not possible to show the GDP of the Scottish or cross-border RBD individually. However, forecasters have used econometric models to estimate the output of the Scottish RBD⁹ and suggest that it would be £64,362 billion: showing that over 92% of Scottish output is generated in the Scotland RBD.

While an index enables clear comparisons of the performance of an individual sector it conceals the relative size of the contribution that the sector makes to the Scottish economy as a whole. Figure 2 shows the percentage of GDP generated by some of the main sectors. It clearly illustrates the current dominance of the service sector: accounting for over two-thirds of Scottish GDP. However, it is the valuable contribution that the other areas produce; in excess of £20 billion, that is of most interest to us here as their use of water makes a direct contribution to their output. Amenity and recreation uses are also valued however they do not have an industrial classification of their own. Section 2.4 discusses this and the contribution of almost £4.5 billion that tourism makes to the Scottish economy. The following sections look at all of these water using industries in more detail.