Shetland's Economy

Shetland's Successful Economy

Although fish and oil generate most income in Shetland, there are sizeable contributions from livestock rearing, tourism, quarrying and the creative industries, including knitwear and crafts.  Unemployment in the islands has been very low for three decades; in the past ten years, it has varied between 0.7% and 1.6% and has usually been less than half the Scottish average.

For a full analysis of Shetland’s economy, together with a vast amount of other information about the islands, you might like to look at 'Shetland in Statistics', produced annually and available as a .pdf download on the Shetland Islands Council web site. 

Service Sector

Three quarters of the islands' employees are in the service sector and many of them work in public services.  The Council employs more than a quarter of the workforce.  That’s partly because – despite a relatively small population - all the usual services have to be provided and partly because the Shetland Islands Council does things that other councils usually don’t, such as running local ferry services and all the islands’ ports apart from Lerwick.  Other public and voluntary sector employers include the health service and a number of local trusts that, partly using oil revenues, provide vital extra help for the arts, sport, environmental improvements and economic development.

Shetland Seafood - The Pick of the Best 

The fishing industry - which includes the catching, farming and processing of fish and shellfish – is Shetland’s biggest sector by some way.  In total, it’s worth well over £200m a year.

Herring and mackerel make up about 60% of the Shetland catch and about 60,000 tonnes – worth £43m - are landed annually.  Bottom-dwelling whitefish like haddock, cod and monkfish are more valuable and these and other species make up the rest of the catch, earning around £24m.

Around 25,000 tonnes of farmed salmon is produced each year and there is also a growing market for shellfish.  Mussels have been especially successful in winning customers, not least because they are an entirely natural product, simply growing on ropes suspended in the sea.

Winning the Nation's Oil

Discreet though it is, oil’s presence is worth over £100m a year, not counting the value of the oil itself.  Sullom Voe Terminal opened in 1978 and, at its peak, was pumping over 55 million tonnes annually.  It still handles around 10 million tonnes of oil a year from oilfields in the North Sea and the Atlantic. About 600 jobs depend on the terminal, the tugboats, pilot launches and port administration.  Thanks to some of the strictest controls in the world, continuous scientific monitoring indicates that pollution from the terminal has been minimal.

At the north end of Lerwick’s harbour, there is a base for vessels that service the offshore oil and gas platforms.  Lerwick Port Authority is still very much involved in the offshore service business.

Waste Recycling

Because it simply isn’t economic to transport waste to recycling centres on the UK mainland, Shetland has had to devise appropriate ways of recycling all manner of materials, including less common ones such as oilfield drilling mud.  

Much of Shetland’s domestic waste, together with some industrial waste, is used as fuel for a district heating system that warms homes, businesses and public buildings in Lerwick.  However, many materials are recycled.  Scrap metal is exported for melting down.  Glass is used as aggregate in paving slabs, as a decorative product or as a shot blasting material.  Even old Shetland jumpers find a new life, being used in the teddy bears made in Shetland.

Quarrying

Thanks to its varied geology, Shetland has several quarries producing high-quality roadstone and other aggregates, some of which is exported.  The island of Unst is home to Britain's only commercial talc mine. 

Agriculture

Shetland is perfect sheep-rearing country. The hardy local breed lives on the hill all year round, thanks to their exceptionally fine, soft wool - the basis of the famous Shetland and Fair Isle knitwear industry. 

Shetland lamb has a unique flavour, due in part to grazing seaweed along the shore.  It’s recognised as unique in the award of the coveted Protected Designation of Origin.  Some lambs are kept in Shetland over the winter, but most leave Shetland for fattening in mainland Scotland.  Careful husbandry keeps island sheep free of many diseases common on the mainland  There’s more about Shetland’s award-winning lamb on the Taste Shetland website.

Shetland is almost self-sufficient in milk and local cheeses are available.  Pork and free-range eggs are produced for local consumption.  Potatoes, carrots and turnips are widely grown and small quantities of other fruits and vegetables are also cultivated, including strawberries and rhubarb, which grows particularly well.  Delicious local honey is also to be found.

Textiles 

The words "Shetland" and "Fair Isle" have long been pirated by unscrupulous textile firms all over the world.  The genuine article is made only in the Shetland Islands and bears the "Shetland Lady" trademark. The combination of softness, light weight and warmth is unbeatable. 

As well as modern factories making machine-knit garments there are still many hand-knitters working part-time at home.  Traditional patterns, centuries old, are complemented by the work of modern local designers.

Interest in pure, natural wool from Shetland is increasing.  As well as finding its way into exquisite jumpers, you can also buy fine lace scarves and shawls and even carpet in natural colours.  

New Technology

Shetland may be at Britain’s northern extremity, but local businesses are involved in some pioneering work.

One local firm has been collaborating with others on wave energy projects and has developed specialised equipment for the United States navy.  Another has become involved in wind energy throughout Scotland.  A consortium of local companies brings its expertise to bear on some of the greatest challenges facing the oil and fishing industries.  A local inventor has patented a device which could see the return of sail power to fishing and other vessels.  

With a link to the Faroe-Scotland fibre-optic cable, super-fast broadband connections are becoming a reality in the islands, with benefits for all Shetland’s businesses but especially the creative industries, for which the hub will be the islands’ new arts centre, Mareel.  Shetland’s relatively cool climate makes it attractive as a location for such facilities as server farms.

What Next?

On This Site

  • Learn about Shetland's fascinating history
  • Discover the exceptional choice of food and drink Shetland has to offer

From Other Sites

  • A detailed breakdown of the economic activity in Shetland can be found in the Shetland in Statistics book published by the local authority
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