A highly respected Scottish economist expects oil and gas to remain Scotland’s fastest growing industrial sector despite the collapse in commodity prices wreaking doom and gloom in the industry.
The beleaguered oil and gas sector is set to retain its top spot on a list of forecast growth rates for Scottish industries over the next few years, a report by Tony Mackay will show.
But the growth is “modest” compared to prior years and comes after the value of the sector collapsed by two thirds, from £13.3billion in 2014 to just over £4.4billion in 2015.
Mr Mackay, of Inverness-based Mackay Consultants said: “That is a massive fall but explained by the collapse in oil prices.
“It may be surprising that the oil and gas industry tops the list but that is because of an assumed recovery from the low of 2015. The industry’s output in 2018 will still be significantly below what it was in 2013
and 2014.”
According to the report, Prospects for the Scottish Economy 2016-18, the oil and gas sector is set to grow 5% each year through to 2018.
In comparison, fishing is set to grow 3.7% over the period and agriculture behind this at 3.3%.
The whisky industry, which has been suffering from a slump in global sales, is expected to be bottom of the list of 26 sectors, shrinking 2.4% by 2018.
The collapse in North Sea economic output will have further knock on effects on the Scottish economy, the firm predicts.
Mr Mackay expects the oil and gas recession will knock Scotland’s overall GDP, which he believes will grow only 1.8% on average until 2018, which is below the long term average of 2%.
The ongoing downturn will also see Scotland’s three main oil and gas reliant areas – Aberdeenshire, the Shetland Islands and Aberdeen City – take the bottom three in a list of growth prospects among Scotland’s 32 local authority areas.
The report expects growth of just 1.6% in Aberdeenshire, 1.4% in Shetland Islands and just 1.3% expansion in Aberdeen City.
Prospects for the Scottish Economy 2016-18 will be published in Thursday.
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