The State of Britain

EM

A decrease in the region’s productivity and the performance of the EM’s economy relative to other parts of the UK mixed

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A nowcast for the EM for the 12 months ended March 2021 which incorporates the second lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the EM economy contracted by 9.4%.

This ranked the EM ‘best’ in the UK (previous ranking also top) with Wales’s 13.4% contraction the ‘worst’. The UK overall posted -11.8% on the same measure.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies.

Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time. This is the last nowcast that will be published by ESCoE with the ONS taking over the running of the model in the future.

ONS GDP to December 2020

Official ONS figures for an earlier period which reflect a mix of continued recovery from the first lockdown but also a slowdown from the second lockdown show the region’s performance relative to other parts of the UK.

The ONS’s figures for the quarter to December 2020 showed the EM post growth of -0.8% compared with 19.6% to September 2020.

This placed the EM bottom (previous ranking second) out of the twelve UK ‘regions’. London was top with quarterly growth of 3.1% whilst the East Midlands was bottom, posting growth of -0.8%. UK growth was 1%.

In this period, the EM’s best sector was transport at 7.4% whilst accommodation fell by 18.4. Production, Construction and Services were -2.7%, -0.9% and -0.2%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region fell by 14,000 to 118,000 between March and May 2021; the drop of 0.5% took the rate to 4.9%. At 6.5% London was the highest; Northern Ireland had the lowest rate of 3.6%, with the UK rate at 4.8%.

The South East had the highest employment rate at 77.7%, this compared with 70.3% in Northern Ireland and 74.8% in the EM where 2.3m are employed; the UK rate was 74.7%.

Public sector employment in the EM increased by 3.5% to 366,000 in the year to March 2021, which was 16.5% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.8% in London which was the lowest.

Productivity

ONS figures also showed that in 2020, output per hour worked fell by 0.6% in the EM which ranked the region tenth out of the 12 UK ‘regions’. Productivity growth in 2019 was best in the North West, increasing by 4.6% and fell the most in the West Midlands, decreasing by 1.4%. Output per hour worked in the UK overall increased by 0.4%.

Research and Development

The region attracted £2.4bn of R&D spend in 2019, up from £2.2bn in 2018. This ranked the EM eighth in the UK (previous ranking eighth). Over the same period the South East did best and secured £7.5bn of R&D expenditure with the North East only attracting £0.7bn.

Overall UK R&D spend rose by £1.3bn (3.4%) to £38.5bn in 2019 – the lowest percentage growth since 2013. Most R&D expenditure was in the business sector at £25.9bn (67% of the UK total), followed by the higher education sector at £9.1bn (24%).

Total R&D expenditure represented 1.74% of GDP in 2019; compared with 1.59% in 2008 and 1.72% in 2018. Overseas funding of R&D increased by 4.1% to £5.6bn in 2019 compared with 2018; this was 0.8% higher than the peak in 2014 of £5.5bn.

Housing

The EM’s average property price fell by 0.2% in May to £216,077. The drop took the annual increase to 11%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.

The East Midland’s economy powers out of the first Lockdown but wages drop significantly

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Official ONS figures which reflect the economy opening up after the first lockdown show the region’s performance relative to other parts of the UK.

These stats compare GDP in the quarter ended September 2020 with the same quarter a year earlier. These showed that the EM’s growth was -6.4% compared with -23.5% the previous quarter. This placed the EM sixth (previous ranking eleventh) out of the twelve UK ‘regions’.

Northern Ireland topped the table with growth of -2.9% whilst UK growth over the same period was -7.5%. The West Midlands was bottom, posting growth of -11.3%.

In the same report, the ONS’s figures for the standalone quarter to September 2020 showed the EM post growth of 19.6% compared with -18.5% in April to June 2020.

This placed the EM second (previous ranking fifth) out of the twelve UK ‘regions’. The South West was top with quarterly growth of 19.9% whilst London was bottom, posting growth of 13.3%; UK growth was 16.9%.

In this period, the EM’s best sector was accommodation at 248% compared with agriculture at -1.3%. Production, Construction and Services were 25%, 35% and 17%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was down 28,000 at 119,000 between January and March; this took the rate to 4.9%. At 6.8% London was the highest; the South East had the lowest rate of 3.4%, with the UK rate at 4.8%.

The South East had the highest employment rate at 78.5%, this compared with 69.1% in Northern Ireland and 75.3% in the EM where 2.3m are employed; the UK rate was 75.2%.

Public sector employment in the EM increased by 2.1% to 360,000, which was 16.1% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.5% in London which was the lowest.

In December, average earnings in the EM grew to £672 per week. London had the highest average earnings of £871 and the lowest average earnings of £584 were recorded in the North East and the East Midlands.

Earnings in Scotland increased the most in the UK by £37 per week whereas the biggest drop in wages was £50 in the East Midlands. The rate of annual pay growth was 4.0% for total pay and 4.6% for regular pay. In real terms, total pay is growing at a faster rate than inflation at 3.1%, with regular pay growth at 3.6%. Public sector pay grew at 5.6% compared with 3.7% in the private sector.

The public sector saw the highest estimated growth in total pay. All sectors saw positive growth, although construction (1.2%) and manufacturing (1.9%) had smaller growth than the other sectors. This is an improvement on the growth rates in April to June 2020, the three-month period with the biggest falls in average pay, when all sectors except for the public sector had negative growth rates.

Housing

The EM’s average property price increased by 1.9% in March 2021 to £219,950. The uplift took the annual increase to 12.4%. In comparison, UK prices grew by 1.8% to £256,405 during March, an annual growth rate of 10.2%.

The EM economy performs the ‘best’ in the pandemic

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A nowcast for the EM for the 12 months ended December 2020, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the EM economy contracted by 8.9%.

This ranked the EM ‘best’ in the UK. Over the same period London’s 12.9% contraction was the ‘worst’.

ESCoE also gave estimates of regional growth over a longer period. Over the last five years, London, the East of England and the West Midlands have grown relative to the other parts of the UK despite experiencing some of the largest declines in activity in 2020.

At the bottom of the table, the North East of England is an outlier in terms of weak economic performance and the devolved administrations have also posted below average results. The EM was ranked sixth.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to June 2020

Official ONS figures for an earlier period which reflects the full effect of the first lockdown show the region’s performance relative to other parts of the UK.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended June 2020 with the same quarter a year earlier. These showed that the EM’s growth was -23.5% compared with -4.6% the previous quarter. This placed the EM eleventh (previous ranking tenth) out of the twelve UK ‘regions’.

London topped the table with growth of -16.3% whilst UK growth over the same period was -20.7%. The West Midlands was bottom, posting growth of -24.7%.

In the same report, the ONS’s figures for the standalone quarter to June 2020 showed the EM post growth of -18.7% compared with -4.1% in January to March 2020.

This placed the EM sixth (previous ranking eleventh) out of the twelve UK ‘regions’. No region showed positive growth. Northern Ireland was top with quarterly growth of -13.6% whilst the West Midlands was bottom, posting growth of -21%.

In this period, the EM’s best sector was finance at -0.7% whilst accommodation fell by -74.1%. Production, Construction and Services were -21.1%, -35% and -16.8%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was 25,000 higher at 144,000 between October and December; the uplift of 1% took the rate to 5.3%. At 7% London was the highest; Northern Ireland had the lowest rate of 3.6%, with the UK rate at 5.1%.

The South East had the highest employment rate at 78.6%, this compared with 69.4% in Northern Ireland and 75.2% in the EM where 2.2m are employed; the UK rate was 75%.

Public sector employment in the EM increased by 1.6% to 357,000, which was 16.2% of the workforce. At 25.3% Northern Ireland had the highest level of public sector employment which compared to 14.3% in London which was the lowest.

In December, average earnings in the EM increased to £699 per week. London had the highest average earnings of £862’ the lowest average earnings of £555 were recorded in North East.

Earnings in Wales increased the most in the UK by £44 per week whereas the biggest drop in wages was £27 in Yorkshire and the Humber. The rate of annual pay growth was 4.7% for total pay and 4.1% for regular pay. In real terms, total pay is growing at a faster rate than inflation at 3.8%, with regular pay growth at 3.3%.

The finance and business services sector saw the highest estimated growth in total pay, at 6.8%. All sectors saw positive growth, although construction (1.9%) and manufacturing (1.5%) had smaller growth than the other sectors. This is an improvement on the growth rates in April to June 2020, the three-month period with the biggest falls in average pay, when all these sectors except for the public sector had negative growth rates. Public sector pay growth is now 4.3%.

Housing

The EM’s average property price increased by 2.8% in December 2020 to £215,046. The uplift took the annual increase to 10.8%. In comparison, UK prices grew by 1.2% to £251,500 during September, an annual growth rate of 8.5%.

The EM economy contracts by 9% led by the education sector at -20%

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A nowcast for the EM for the 12 months ended September 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the EM economy contracted by 8.7%.

This ranked the EM eighth in the UK and suggests the regional economy has so far coped ‘reasonably’ with the pandemic relative to the other eleven UK ‘regions’ on this metric. Over the same period the North East was ‘best’ with a fall of 6.5%, with Wales’s 11.4% contraction the ‘worst’; the UK decline according to these figures was c8%.

However, the total percentage change in the EM’s GDP relative to the end of 2019 is about -9%. This compares with -8% across the UK and about -16% in the North East.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to March 2020

Official ONS figures for an earlier period which reflects the start of the Covid 19 turmoil show the region’s performance relative to other parts of the UK.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended March 2020 with the same quarter a year earlier. These showed that EM growth was -4.6% compared with -0.6% the previous quarter. This placed the EM tenth (previous ranking eleventh) out of the twelve UK ‘regions’.

London topped the table with growth of 1.5% whilst UK growth over the same period was -2.2%. The West Midlands was the worst performer and grew by -5.3%. London was the only region to show positive growth.

In the same report, the ONS’s figures for the standalone quarter to March 2020 showed the EM post growth of -4.1% compared with -0.6% in October to December 2019.

This placed the EM eleventh (previous ranking eleventh) out of the twelve UK ‘regions. No region showed positive growth. London was top with quarterly growth of -1.5% whilst Northern Ireland was bottom, posting growth of -4.5%.

In this period, the EM’s best sector was finance with growth of 2.2% but education fell by 20%. Production, Construction and Services were by -2.8%, -4.4% and -4.5%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 8,000 higher at 119,000 between July and September; the uplift of 0.4% took the rate to 4.9%. At 6.7% the North East was the highest; Northern Ireland had the lowest rate of 3.6%, with the UK rate at 4.8%.

The South East had the highest employment rate at 78.3%, this compared with 70.5% in Northern Ireland and 75.0% in the EM where 2.3m are employed; the UK rate was 75.3%.

Housing

The EM’s average property price increased by 0.5% in September 2020 to £204,581. The uplift took the annual increase to 5.0%. In comparison, UK prices grew by 1.7% to £244,513 during September, an annual growth rate of 4.7%.

The regional economy shrinks by 4.5% following lockdown, the best UK performance, and EM house prices increase by 4.7%

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A nowcast for the EM for the 12 months ended June 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the EM economy contracted by 4.5%.

This ranked the EM first in the UK and suggests the regional economy has so far coped ‘better’ with the pandemic relative to the other eleven UK ‘regions’. Over the same period London’s 7.4% contraction was the ‘worst’ with the UK decline according to the Office for National Statistics (‘ONS’) figures at 5.3%.

ESCoE is a partnership of research institutions and the ONS and has highlighted that during these unprecedented times, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to December 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil, show the region’s performance relative to other parts of the UK. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fifth estimate for the EM, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended December 2019 with the same quarter a year earlier. These showed the EM contracted by 0.6%, a deterioration on +0.7% the previous quarter. This placed the EM ninth (previous ranking sixth) out of the twelve UK ‘regions’.

London topped the table with growth of 5% whilst UK growth over the same period was 0.9%. The West Midlands was again the worst performer and contracted by 2.7%. The North East, Wales, East Midlands and the North West were the other ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to December 2019 also showed a worsening picture in the EM with the data poorer than the previous quarter. The EM economy contracted by 0.6% in October to December 2019, following -0.3% in July to September 2019.

This placed EM eighth (previous ranking tenth) out of the twelve UK ‘regions. The EM was one of seven regions of the UK that saw their economies contract but overall UK growth was flat.

The South West of England was top with quarterly growth of 0.8% whilst the North East was bottom, posting a drop of 1.3%.

In this period, the EM’s best sector was professional scientific with growth of 0.8% but arts fell by 9.3%. Overall production was -0.7%, construction +0.8%, services -0.8% and agriculture 0.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 13,000 higher at 107,000 between April and June; the uplift of 0.6% took the rate to 4.3%. At 5.2% the North East was the highest; Northern Ireland had the lowest rate of 2.5%, with the UK rate at 3.9%.

The South East had the highest employment rate at 79.7%, this compared with 71.7% in Northern Ireland and 77.3% in the EM where 2.5m are employed; the UK rate was 76.4%.

Housing

The EM’s average property price increased by 1.1% in April 2020 to £200,513. The uplift took the annual increase to 4.7%. In comparison, UK prices dropped by 0.2% to £234,612 during April, an annual growth rate of 2.6%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the April figures will therefore reflect those completions that occurred before lockdown.

This is the first publication of the UK HPI since it was suspended in May 2020. The UK Property Transactions Statistics for April 2020 showed that that between March 2020 and April 2020, transactions decreased by 55.5%.

Significant regional job losses at Rolls Royce, EM’s income growth the UK’s slowest with Nottingham and Leicester average incomes at just over £13,000

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Rolls Royce has confirmed the locations of the job losses it is to make this year. Last month the Derby-based firm said 9,000 jobs were to be cut, mostly in its Civil Aerospace division as a result of air travel being hit by the pandemic. Around 1,500 roles will be lost in Derby and the East Midlands with voluntary redundancies also available to all employees.

Wicksteed Park in Kettering has gone into administration. A new company will be formed with the aim of raising funds to re-open the 99-year-old theme park but until then 48 permanent staff and 67 part-time and other jobs have been lost.

Two other regional attractions have secured National Lottery grants to cover losses incurred by the lockdown. Creswell Crags, a series of caves used during prehistoric times and Cromford Mills have been awarded £250,000 from the Heritage Emergency Fund.

Intu – the owner of some of Britain’s most high-profile shopping malls – has called in administrators. The firm ran the half-demolished Broadmarsh Centre in Nottingham which has received £17m of public money. In 2018 the city council committed to spending c£50m on the project.

The Stats

This month the ONS published regional household disposal income figures for 2018. Total gross disposable household income (GDHI) in the UK in 2018 was £1.4bn. Of that, 86.3% was in England, 7.6% was in Scotland, 3.8% was in Wales and 2.3% was in Northern Ireland.

The average UK income per head after direct and indirect taxes were taken off was £21,109.  England was the only country above the UK average at £21,609 but growth in incomes was best in Scotland and Northern Ireland at 5.1% and 4.7%. England’s growth was the same as the UK at 4.6%; Wales grew by 4.4%.

At a regional level, London had the highest GDHI per head where, on average, each person had £29,362 available to spend or save; the North East had the lowest at £16,995 which compares with a UK average of £21,109. The EM beat the WM by £5 at £18,277.

At a local level, Kensington and Chelsea and Hammersmith and Fulham district had the highest GDHI per head at £63,286 with Nottingham the lowest at £13,138. All the top 10 local areas were in London or the South East with the bottom 10 within the North West, Yorkshire and The Humber, East Midlands, West Midlands, and Northern Ireland regions.

The wealthiest part of the EM was West Northamptonshire with incomes of £21,774. This ranked the area 50th out of 179 districts of the UK. The poorest areas of the region and the UK were Nottingham at £13,138, beating Leicester at £13,269.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%.

At the local level, Kensington & Chelsea and Hammersmith & Fulham was again best in the UK with growth of 7.6% whereas Luton was the worst and only grew by 0.9%.

In the EM, income growth in North Nottinghamshire was top at 5.0% with East Derbyshire second at 4.4%. Leicester was the worst regional performer with growth of 1.1%, a ranking of 178th and beating only Luton.

Labour

More data from the ONS showed unemployment in the region was 6,000 lower at 91,000 between February and April; the drop of 0.3% took the rate to 3.7%. Despite narrowing the gap with the West Midlands (4.8%), at 5.2% the North East was still the highest; Northern Ireland had the lowest rate of 2.3%, with the UK rate at 3.9%.

The South East had the highest employment rate at 79.5% which compared with 78.1% in the EM where 2.4m are employed; the UK rate was 76.4%.

Public sector employment in the EM increased by 2.1% in March to 355.000, which was 15.6% of the workforce. At 25.2% Northern Ireland had the highest level of public sector employment which compared to 13.9% in London which was the lowest.

In March, average earnings in the EM increased by £11 to £591 per week. London had the highest average earnings of £847 and the lowest average earnings of £537 were recorded in Northern Ireland.

Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

In the UK overall, average earnings grew by 1.7% or by 0.4% after inflation. If bonuses are included real pay fell by 0.4%.

The public sector saw the highest estimated growth, at 3.2% for regular pay, while negative growth was seen in the construction sector, estimated at negative 1.8%. Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay.

Housing

Estimates of private sector rents for the year to March 2020 were published by the ONS this month.

The median monthly rent was an all time high of £700 in England between 1 April 2019 and 31 March 2020. London had the highest median monthly rent at £1,425 with the North East the lowest at £495. Within local authorities the difference in monthly rental price between the most and least expensive was nearly £2,100.

In the EM rental prices ranged from £495 to £725 with £600 the median.

Data for the 12 months to May 2020 showed private rental prices paid by tenants in the UK rose by 1.5%, unchanged from the previous month. Rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland.

Rental prices increased the most in the South West, up by 2.5%, with the lowest price growth in the North East at 0.8%, the EM recorded 2.5%.

According to the ONS the South West is also projected to have the highest regional rate of growth in households over the next ten years, at 9%. This compares with 8.7% in the EM and 4.3% in the NE (the lowest).

Overall the number of households in England is projected to increase by 1.6m (7.1%) from 23.2m in 2018 to 24.8m in 2028. The EM is forecast to have 2.2m households by 2028.

Given the closure of the housing market following lockdown the ONS has suspended its property price index until further notice.

At -1% the East Midlands economy shrinks the slowest in the UK following lockdown but pre-pandemic data also shows an earlier contraction

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A quarterly nowcast for the EM for the 3 months ended March 2020 which captures the start of lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the EM economy contracted by 1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the EM first and suggests the regional economy has coped better with the pandemic relative to the other eleven ‘regions’ of the UK. Over the same period London fell by 2.2% with Northern Ireland’s 3.9% contraction the ‘worst’; the UK decline was 2%.

For the 12 months ended March 2020 on a rolling 4 quarter basis, ESCoE has estimated that EM growth has dropped from 0.1% to -0.6%.

This ranked the EM last (previous ranking also twelfth) and suggests the region has not improved its position relative to the other eleven parts of the UK although the gap has narrowed. Over the same period UK growth was 0.5%; growth in London (ranked first) was 1.8%; and growth in Wales (ranked eleventh) was -0.5%.

ONS GDP to September 2019

Official ONS figures for an earlier period which reflects Brexit uncertainty rather than Covid 19 turmoil, show the region’s relative dip compared with other parts of the UK.  Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fourth estimate for the EM, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended September 2019 with the same quarter a year earlier. These showed the EM grew by 0.7%, down from 1.9% the previous quarter. This placed the EM sixth (previous ranking fourth) out of the twelve UK ‘regions’.

London topped the table with growth of 5% whilst UK growth over the same period was 1.2%. The West Midlands was the worst performer and contracted by 1.5%, one of three ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures also highlighted that the standalone quarter to September 2019 was poor for the EM and much worse than the previous quarter. The EM economy fell by 0.3% in July to September 2019, following growth of 0.6% in April to June 2019.

This placed the EM last (previous ranking second) out of the twelve UK ‘regions’. The EM was one of four regions of the UK that saw their economies contract but overall the UK grew by 0.5%.

Again London was top with quarterly growth of 1.4% whilst the North West, South East and Northern Ireland all contracted by 0.2%.

In this period, the EM’s best sector was arts/entertainment/recreation with growth of 6.9% but professional/scientific/technical activities fell by 4.6%. Overall services grew by 0.1% and construction by 0.6% but production fell by 2.2% and agriculture by 0.2%.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the region was 4,000 higher at 94,000 between January and March; the uplift of 0.2% took the rate to 3.8%. At 5.4% the North East was the highest; Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80.2% which compared with 78.2% in the EM where 2.4m are employed; the UK rate was 76.6%.

Housing

The EM’s average property price decreased over the month by 0.4% to £194,664. The drop took the annual increase to 2.1%. In comparison, UK prices dropped by 0.2% to £231,855 during March, also an annual growth rate of 2.1%.

The ONS data is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion so the price data in the March figures will therefore reflect those completions that occurred before lockdown.

Given the closure of the housing market following lockdown the ONS has suspended its index until further notice.

EM’s export performance the second best in the UK with the USA the region’s largest market and the region builds 30% more houses

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HMRC has published the latest regional trade figures which show exports and imports for 2019. Given the time period this data reflects Brexit uncertainty rather than Covid 19 turmoil. 

In the year to December 2019, the overall value of UK trade in goods exports increased by 2.1% to £346bn compared with the same period in 2018. The overall value of imports increased by 0.3% to £483bn.

There was an increase in the annual export value in the EM along with five of the 12 UK ‘regions’. The EM’s exports increased by an impressive 9.7% or £2.2bn to £24bn which was 7% of the UK total.  

The leading regional exporter was the SE of England at £46.5bn and Northern Ireland was the smallest at £9bn. The best performer in percentage terms was London which added 17% with EM second; this compared with Yorkshire & the Humber which dropped by 6%.

There was an increase in the annual import value in the EM along with five of the 12 UK ‘regions’. The EM’s imports increased by 4.6% or 1.3bn to £29bn which was 6% of the UK total.

The leading regional importer was the SE at £98bn and Northern Ireland was the smallest at £8bn. In percentage terms London added 12% compared with Scotland which reduced imports by 7%.

The USA was the EM’s largest export marke t with machinery & transport equipment the best export. Most of the EM’s imported goods came from Germany with machinery and transport equipment the biggest import.

Services

This month the ONS published data on regional services imports for 2017. The largest component of services imported into the UK was £51bn of travel. This was 28% of the £181bn UK total imports of services.

The EM’s imported £8bn of services value in 2017 of which £3bn was travel. The biggest importer of services was London at £60bn with Northern Ireland importing £1.6bn.

At a local level, the largest importer of non-travel services into the UK was Camden and City of London at £14.5bn, almost double the next largest importer which was Westminster at £7.9bn. Of the 167 local areas, The Western Isles of Scotland imported the least amount, £21m, with Anglesey next at £31m.

In the EM, Leicestershire CC and Rutland imported £834m of non-travel services compared with £190m in East Derbyshire.

The data on services exports was released by the ONS last year which showed the EM exporting £7.6bn of services which compared with London at £117bn and Northern Ireland at £2.9bn.

Other data

The ONS has also published the latest regional construction sector data to December 2019 which again reflects Brexit uncertainty rather than Covid 19 turmoil. Compared with the previous quarter all parts of the UK recorded a decline with the EM posting a 1.8% drop to £3.2bn. The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with a 0.9% fall. Within this though 4980 new houses were completed in the EM, an increase of 30% on the previous quarter, the biggest uplift in the UK.

More pre-pandemic data from the ONS showed unemployment in the region was 4,000 higher at 100,000 between December and February; the uplift of 0.2% took the rate to 4.0%. Northern Ireland had the lowest rate of 2.5%, the NE the highest at 5.6% with the UK rate at 4%.

The South East had the highest employment rate at 80.1% which compared with 77.7% in the EM’s where 2.4m are employed; the UK rate was 76.6%.

The EM’s average property price decreased over the month by 1.5% to £192,244. The drop took the annual increase to 0.7%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.leading

Mickleover in Derby the wealthiest area in England but Highfield North in Leicester the poorest, all of the region’s LEPs see productivity growth

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The ONS has published average household disposal income estimates for England and Wales in 2018. The incomes shown are after tax and housing costs are taken off.  The analysis has shown that 87% of local areas had an average household income of between £22,500 and £39,200; within this over a third were between £28,000 and £33,600.

Of the 50 areas with the highest total incomes, 41 were in London, with the lowest incomes more widely spread geographically across England and Wales. The North East, East England, London, and the South East had no local areas in the bottom 50.

The wealthiest area in England and Wales was Mickleover in Derby with incomes of £52,200 and the poorest was Highfield North in Leicester with £12,500. The two areas are 30 miles from each other and ranked 7200 places apart.

Four other areas of the region also made the wealthiest top ten; Allestree in Derby, Lady Bay in Nottingham and parts of South Northamptonshire.

Like most regions of the UK, output per hour in the EM is below the UK average. Productivity per hour in the region was 13.5% below the UK average which ranked the region eighth nationally for 2018. One reason for this is the high levels of hours worked and high productivity in London and South East which pulls up the UK average so much that all other regions fall below it.

The ONS has now released data for a longer period and at a subregional level. This gives further insight into EM’s performance.

Perhaps the most useful is the 2018 results for the 44 enterprise regions in the UK which comprise the 38 English local enterprise partnerships (LEPs) and six enterprise regions in Scotland, Wales and the border regions.

Thames Valley Berkshire LEP had the best productivity (in terms of hours and jobs) in 2018 at 35% above the UK average whereas the Black Country LEP at 24% below was the worst.

All of the region’s LEPs recorded productivity below the UK average. The best was SEMLEP ranked 13th at 4% below, the rest all performed poorly and ranged from 10% to 18% below the UK average. Leicestershire LEP, Derbyshire and Nottinghamshire LEP and Greater Lincolnshire LEP were ranked 24th, 28th and 36th.

In terms of productivity growth between 2010 and 2018 the Coventry and Warwickshire LEP was top with growth of 16%. Twelve economic regions recorded productivity levels lower in 2018 than 2010. The worst performer was the Buckinghamshire Thames Valley LEP which saw productivity drop by 11%.

The EM’s results for productivity growth were better. With growth of 7% SEMLEP was ranked 6th in the UK. Greater Lincolnshire LEP was ranked 18th nationally with growth of 3% just beating Derbyshire and Nottinghamshire LEP. Leicestershire LEP was ranked 29th with 1% growth which meant none of the region’s LEPs recorded productivity levels lower in 2018 than 2010.

Despite this, all of the EM’s three subregions recorded productivity below the UK average. Leicestershire, Rutland and Northamptonshire -12%, Derbyshire and Nottinghamshire -14% and Lincolnshire -18%.

At a county level, with the exception of South Nottinghamshire (+0.2%) all of the EM’s economic regions recorded productivity below the UK average. North Northamptonshire had the lowest productivity, 24% below the UK average.

The growth in hours worked between 2010 and 2018 in Leicestershire, Rutland and Northamptonshire was 11%, beating Derbyshire and Nottinghamshire which recorded 9%. In UK terms this level of growth was in the top half of the country’s 40 subregions. Lincolnshire grew 5% which ranked 38th.

If the increase in economic output is also factored in then the sub regional performances are also good, mirroring the region’s LEPs. Lincolnshire was ranked 8th in the UK with growth of 8%, Leicestershire, Rutland and Northamptonshire was placed 15th with 4% and Derbyshire and Nottinghamshire 17th with 3%. 

More data from the ONS showed unemployment in the region was 8,000 higher at 98,000 between November and January; the uplift of 0.3% took the overall rate to 3.9%. Northern Ireland had the lowest rate of 2.4%, the North East the highest with 6.2%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80% which compared with 78% in the EM where 2.4m are employed; the UK rate was 76.5%.

The EM’s average property price decreased by 0.4% to £195,707, which took the annual increase to 2.3%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

EM’s economic growth volatile, depending on the period the region ranked second or last, productivity growth the second best in the UK and a big drop in unemployment

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For the 12 months ended December 2019, a nowcast published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that EM’s growth has dropped from 0.7% to 0.1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the EM last (previous ranking eleventh) and suggests the region has worsened relative to the other eleven parts of the UK. Over the same period UK growth was 1.4% and growth in London (ranked first) was 3.3%.

The latest official ONS figures for an earlier period are better. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the EM, the other eight English regions, and Wales.  GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed the EM economy grew by 1.8%, down from 2% growth the previous quarter. This placed the EM second (previous ranking fifth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.5% whilst UK growth over the same period was 1.4%. The NW was the worst performer and contracted by 0.7%, one of three ‘regions’ (including the WM) in the UK to suffer a decline.

In the same report, the ONS’s figures also highlighted that the standalone quarter to June 2019 was also better for the region than the previous quarter. The EM economy grew by 0.6% in April to June 2019, following growth of 0.1% in January to March 2019.

This placed the EM third (previous ranking ninth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%.

In this period, regional sectors, electricity/gas/steam/air conditioning supply and manufacturing grew by 8.0% and 1.0%. Also finance and wholesale/retail trade grew by 9.4% and 1.9% but EM’s professional scientific and technical activities fell by 3.7%.

In general all sectors in the region grew, with production, services, construction and agriculture expanding by 1.6%, 0.3%, 0.2% and 0.1% respectively. Construction has been the best performer relative to 2017 with agriculture, production and services moderately flat since Quarter 3 (July to Sept) 2018 although production saw an uplift in Quarter 2 2019.

Productivity

Like most regions of the UK, output per hour in the EM was below the UK average. Productivity in the EM was 13.5% under the norm which ranked the region eighth in the UK.

Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.

The EM moved down the rankings slightly to ninth in terms of output per job. This means that on average workers in the EM worked shorter hours for each job compared with the UK average. The region’s 14.5% below the UK average compared with London at 40.5% above.

In terms of growth in output per hour, six regions of the UK expanded. The EM was ranked second as output per hour grew by 2.1%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.

In terms of sectors, productivity in arts/entertainment/recreation was better than expected but finance and insurance disappointed.

On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.

Labour

More data from the ONS showed unemployment in the region decreased by 21,000 to 89,000 between October and December; the big drop of 0.9% took the rate to 3.6%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.

The South West had the highest employment rate at 80.1% which compared with 78.4% in the EM, where 2.5m are employed; the UK rate was 76.5%.

In December, average earnings in the EM fell by £3 to £580 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The EM was ranked eighth (previous ranking also eighth).

In the UK overall, average earnings grew by 2.9% or by 1.4% after inflation. After adjusting for inflation, regular pay is now at its highest level since 2000, whereas total pay (which includes bonuses) is still 3.7% below its peak in February 2008.

Housing

The EM’s average property price increased by 0.5% over the month to £197,048, the uplift took the annual increase to 2.8%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.