National Outcome 1

NO01 - We live in a Scotland that is the most attractive place for doing business in Europe

Despite the challenges of the economic climate Aberdeen is continuing to evolve as a place to do business.  With a raft of major infrastructure projects set to come to fruition in the next decade, improving worldwide transportation links, leisure and tourism and enhancing the area’s business credentials further still, Aberdeen City and Shire is set to continue as a leading business region for many years to come.

Such factors will ensure a local economy with the right conditions to attract new and growing businesses which will flourish and help sustain prosperity whilst also continuing to attract both major international companies and significant foreign investment into the area for some time to come.

LO1A Aberdeen is an even more attractive place in which to do business

Measure

Performance

Note

Net number of new businesses formed within the City

The increase seen in 2007/08 was largely due to the high levels of investment and activity in the oil and gas sector. Since then, there has been a sharp drop in oil prices, as a result of which the high rate of new business formation in 2007/08 is unlikely to be repeated in 2008/09. These figures are expected in November 2009.

Measure

Performance

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Population of City

The population increase in 2008 was due to natural change (i.e. more births than deaths) and net migration (i.e. more moving into the city than leaving).

Measure

Performance

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Proportion of population of working age

The rise in the working age population is due to the increase in the overall population.

Male (16-64): 73,513

Female (16-59): 66,039

Measure

Performance

Note

Rate of new house build

House completion figures for 2008 will not be available until September, but they are likely to be below target, as was the case in 2007. This is mainly due to the current economic climate and the restrictions on credit/mortgages. Demand for new housing is down significantly on previous years.

Target is +42% on 2006/07 baseline by 2016.

Measure

Performance

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Value of Tourism to Aberdeen

Growth between 2007 and 2008 was in line with Tourism Framework for Change targets.

Moving forward, the industry is operating under challenging circumstances. Growth between 08/09 on the same trajectory is unlikely due to the impact of the global economic crisis, the US elections, fuel price instability, poor summer weather and general levels of confidence.

The summer of 2009 appears more positive with the exchange rate and economic situation favouring ‘staycations’ by domestic residents and Scotland being approximately 30% cheaper than 2008 for European visitors from the Euro zone. Combined with improved weather and the Homecoming promotion and events, growth will be more likely.

In addition, investment in new hotel bed stock due to open in 2009/10 increases the availability and choice of accommodation for the business and leisure visitor. Further investment in leisure and retail developments increases Aberdeen’s tourism offering, especially for day-trip and weekend breaks, which will, in turn, assist in achieving growth targets.

Measure

Performance

Note

No. of renewable energy jobs in Aberdeen Renewable Energy Group (AREG) membership.

The majority of AREG members come from the oil and gas industry and when the economic recession hit in 2008 along with a drop in oil prices, companies tended to focus on their core business rather then investing in new opportunities. Therefore, the number of renewable energy jobs in 08/09 was less than the expected target. However, in the next few years there will be huge opportunities for companies in Aberdeen in the offshore wind sector.  Following the Crown estate round 3 and Scottish rounds - the capital investment in offshore wind in the UK up to 2020 is expected to be around 115bn euros. In order to grasp this opportunity some companies such as Wood Group are already setting up dedicated divisions focusing on renewable energy.

Measure

Performance

Note

Value of Business Tourism direct from Convention Bureau

The main reason for the downturn in business during 2007-08 was lack of availability of 4/5 star hotel accommodation to support conferences. Low room allocations from hotels to support major conferences also played a role as the geographical spread of hotels substantially increased conference costs for transportation and deterred organisers from choosing Aberdeen.

Confirmed business increased during 2007-08 mainly due to the fact that planned new hotel developments were announced and a number of conferences booked in anticipation that the developments will be complete for their future conference.

Bureau confirmed business from 01 April to 31 July 2009 stands at £3.1million compared with £6.2million confirmed for the same period last year.  The target for 2009-10 is £12million. The Bureau is extremely pro-active in its pursuit of conference business and will endeavor to meet the target, but hotel issues still remain a factor.