The State of Britain

NW

The North West economy contracts by 5.2% following lockdown but pre-pandemic data shows an earlier strong expansion and the Job Retention Scheme helps push regional unemployment down

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A nowcast for the NW 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 NW economy contracted by 5.2%.

This ranked the NW third 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 the East Midlands was ‘best’ with a fall of 4.5%, with London’s 7.4% contraction the ‘worst’; the UK decline according to the Office for National Statistics (‘ONS’) figures was 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 moving up places 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 NW, 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 NW contracted by 0.4%, an improvement on -1.3% the previous quarter. This placed the NW seventh (previous ranking eleventh) 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 much improving picture in the NW with the data far better than the previous quarter. The NW economy grew by 0.5% in October to December 2019, following -0.5% in July to September 2019.

This placed the NW second (previous ranking last) out of the twelve UK ‘regions. The NW was one of five regions of the UK that saw their economies grow but overall UK growth was flat.

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

In this period, the NW’s best sector was manufacturing with growth of 4.6% but education fell by 4%. Overall production was +4.1%, construction +0.1%, services -0.3% and agriculture -0.2%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 20,000 lower at 128,000 between April and June; the drop of 0.5% took the rate to 3.5%. 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 76.2% in the NW where 3.5m are employed; the UK rate was 76.4%.

Housing

The NW’s average property price fell by 0.2% in April 2020 to £167,809. The drop took the annual uplift to 3.4%. 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%.

NW clean energy projects, incomes in Cheshire East striking, Lancaster and Wyre growth disappoints

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Plans for two nuclear power plants at Moorside, adjacent to the Sellafield reprocessing plant, have been submitted by an EDF-led consortium. The firm wants to build two pressurised water reactors of the same type as Hinkley Point C in Somerset; 25,000 jobs could be created across the region.

In Greater Manchester, one of the world’s first commercial liquid air batteries will be built after being awarded a £10m government grant.

The CryoBattery facility in Carrington will store spare green energy and could power up to 200,000 homes. The technology stores compressed air in huge containers which is used to generate electricity.

Construction of the facility is expected to start later this year and enter commercial operation in 2022. The new plant will create up to 200 new jobs.

In Lancashire, the leaders of all 15 local authorities have voted for an elected mayor to head up a combined county wide authority. The deal would hand Lancashire more powers and funds of at least £30m a year for 30 years. Mayors were elected in the neighbouring regions of Greater Manchester and the Liverpool City region, as well as other English regions, in 2017.

Also in the county, Blackpool Illuminations will be extended to 3 January to help the town’s Covid-19-stricken tourism trade. The lightshow’s switch-on this year will be live-streamed on 4 September, the first time in more than 70 years the resort’s switch-on event will not be held on the seafront.

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 NW was £18,362.

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 North West was Cheshire East with incomes of £24,524. This ranked the area 28th out of 179 districts of the UK, the highest ranking outside London and the SE of England. The poorest area of the region was Blackburn with Darwen at £13,741, just beating Manchester at £14,864. Blackburn was ranked 177th in the UK, only above Nottingham and Leicester.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%. NW growth was 4.4%.

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 NW, income growth in Greater Manchester South West was top at 6.2% with Manchester second at 5.5% Blackburn beat the UK average with growth of 5% and was ranked 55th out of 179.  Lancaster and Wyre was the worst regional performer with growth of 2.6%, a ranking of 165th.

Labour

More data from the ONS showed unemployment in the region was 12,000 lower at 148,000 between February and April; the drop of 0.3% took the rate to 4.1%. At 5.2% the North East was 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 75.9% in the NW where 3.5m are employed; the UK rate was 76.4%.

Public sector employment in the NW increased by 1.8% in March to 623,000, which was 17.6% 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 NW dropped by £11 to £595 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 wages dropped the most by £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 NW rental prices ranged from £495 to £725 with £525 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%, followed by the North West, which increased by 1.0%.

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 5.7% in the NW 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 NW is forecast to have 3.3m households by 2028.

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

The North West economy shrinks more slowly than other regions at -1.5% and pre-pandemic data shows the region also contracted earlier

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A quarterly nowcast for the NW 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 NW economy contracted by 1.5%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the NW joint third and suggests the regional economy has coped better with the pandemic relative to the other eleven ‘regions’ of the UK. Over the same period the 1% fall in the East Midlands was ‘best’ 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 NW growth has dropped from 2% to 1.4%.

This ranked the NW second (previous ranking third) and suggests the region has marginally improved its position relative to the other eleven parts of the UK. Over the same period UK growth was 0.5%; growth in London (ranked first) was 1.8%; and growth in the East Midlands (ranked twelfth) was -0.6%.

ONS GDP to September 2019

Official ONS figures for an earlier period which reflect Brexit uncertainty rather than Covid 19 turmoil are, relatively, not so good for the region. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its fourth estimate for the North West, 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 more volatile figures showed the NW contracted by 1.3%, down from -0.3% the previous quarter. This placed the NW eleventh (previous ranking tenth) 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 also poor for the NW but an improvement on the previous quarter. The North West economy contracted by 0.2% in July to September 2019, following a contraction of 1.5% in April to June 2019.

This placed the NW joint ninth (previous ranking eleventh) out of the twelve UK ‘regions. Four regions of the UK saw their economies contract but overall the UK grew by 0.5%.

Again London was top with quarterly growth of 1.4% whilst the East Midlands was the worst performer and contracted by 0.3%.

In this period, the NW’s best sector was water supply/sewerage with growth of 36.1% but manufacturing fell by 6.2%. Overall services grew by 0.6% but production fell by 3.4%, construction by 1.7% and agriculture by 0.1%.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the region was 9,000 lower at 148,000 between January and March; the drop of 0.3% took the rate to 4%. 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 76.2% in the NW where 3.6m are employed; the UK rate was 76.6%.

Housing

The NW’s average property price increased over the month by 0.2% to £166,202. The uplift took the annual increase to 3.4%. In comparison, UK prices dropped by 0.2% to £231,855 during March, 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 feeding into 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.

The USA the NW’s largest export market but volumes decline, Manchester imports the most services, £2.1bn more than Blackburn

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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 a decrease in annual export value in the NW along with five of the 12 UK ‘regions’. NW exports decreased by 2.2% or 615m to £27bn which was 8% of the UK total.

The biggest 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% compared with Yorkshire & the Humber which dropped by 6%

There was a decrease in annual import value in the NW along with five of the 12 UK ‘regions’. NW imports decreased by 2.3% or 894m to £37.9bn which was 8% of the UK total.

The biggest 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 NW’s largest export market with machinery & transport equipment the best export. Most of the NW’s imported goods came from Germany with machinery & transport equipment the biggest import.

Services

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

The NW imported £16.6bn of services value in 2017 of which £5.8bn was travel. The largest importer of services was London at £60bn with Northern Ireland importing £1.6bn.

At a local level, the biggest 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 NW, Manchester imported £2.2bn of non-travel services compared with £89m in Blackburn with Darwen.

The data on services exports was released by the ONS last year which showed the NW exporting £19.2bn 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 NW posting a 2.2% drop to £4.9bn.  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 5520 new houses were completed in the NW, an increase of 12% on the previous quarter.

More pre-pandemic data from the ONS showed unemployment in the region was 4,000 higher at 158,000 between December and February; the uplift of 0.1% took the rate to 4.3%. 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 75.6% in the NW where 3.5m are employed; the UK rate was 76.6%.

The NW’s average property price decreased over the month by 0.5% to £163,602. The drop took the annual increase to 0.9%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.

Addlington and Dudlow’s Green the wealthiest parts of the region with Blackpool South the poorest, Cheshire and Warrington LEP the most productive but the best growth seen in Lancashire

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The ONS has published average household disposal income estimates for England and Wales for 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 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.

The wealthiest areas of the North West were the Addlington area of Cheshire and the Dudlow’s Green of Warrington with incomes of £39,800. This ranked the areas 184th out of the 7,201 districts of the UK recorded. The poorest area of the region was Blackpool South with £13,300. This area was ranked 7,199 out of the 7,201 areas of the UK recorded.

Last month the ONS published analysis which showed that like most regions of the UK, output per hour in the NW is below the UK average. Productivity per hour in the NW was 8.4% below the UK average which ranked the region fifth nationally for 2018. One reason for this is the high levels of hours worked and high productivity in London and the 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 the NW’s performance.

First, 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) in 2018 at 35% above the UK average, whereas the Black Country LEP at -24% was the worst.

At +6%, the Cheshire and Warrington LEP was one of eight economic regions which beat the UK average and was ranked 5th, all of the NW’s other LEPs recorded productivity below the UK average. Liverpool City region was 19th at 8% below, Lancashire LEP 23rd and Greater Manchester 25th at -11% but the worst regional performer was Cumbria at -14% which ranked it 29th.

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 NW’s results for productivity growth (rather than overall productivity) were more mixed. With growth of 8.8% Lancashire was the regional star and was ranked 3rd nationally, just beating Cumbria which was ranked fourth with 7.5% growth. Cheshire and Warrington LEP grew by 3.8% and was ranked 15th but the region’s other two LEPs recorded productivity levels lower in 2018 than 2010. Greater Manchester was -0.5% and was ranked 36th which was four places better than Liverpool City region at -3.3%.

On subregions rather then enterprise areas, with the exception of Cheshire East (+8%) and Greater Manchester South West (+0.3%), all of the NW’s subregions recorded productivity below the UK average. Greater Manchester North East had the lowest productivity in the region, 27% below the UK average.

The growth in hours worked between 2010 and 2018 in Greater Manchester was 17%, just beating Cheshire which recorded 16%. In UK terms this level of growth was in the top ten of the country’s 41 subregions. Merseyside grew by 9% and Lancashire by 7% but Cumbria recorded a decline of 3.7%, the only part of the UK to do so.

If the increase in economic output is factored in then the sub regional performances are similar to the geographically associated LEPs. So despite Cumbria recording a decline of 3.7% in hours worked, it was ranked 7th in the UK with growth of c8%.

More data from the ONS showed unemployment in the region was 16,000 higher at 163,000 between November and January; the uplift of 0.4% took the rate to 4.4%. Northern Ireland had the lowest rate of 2.4%, the North East the highest at 6.2%, with the UK rate at 3.9%.

The South East had the highest employment rate at 80% which compared with 75.8% in the NW where 3.5m are employed; the UK rate was 76.5%.

The NW’s average property price decreased by 1.5% to £164,769 during the month which took the annual increase to 2.1%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

Take your pick, depending on the period the NW economy ranked third or last in terms of growth, the region’s productivity ranked fifth in the UK despite no growth

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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 NW growth has increased from 1.7% to 2%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the NW third (previous ranking also third) and suggests the region has maintained its position relative to the other eleven parts of the UK. Over the same period UK growth was 1.4%; growth in London (ranked first) was 3.3%; and growth in the East Midlands (ranked twelfth) was 0.1%.

Official ONS figures for an earlier period are not so good. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the North West, 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 figures are for the period six months before ESCoE’s 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 NW contracted by 0.7%, down from +1.8% the previous quarter. This placed the NW last (previous ranking sixth) 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 one of three in the UK to suffer a decline.

In the same report, there was no surprise that the ONS’s figures also highlighted that the standalone quarter to June 2019 was worse for the region than the previous quarter. The North West economy declined by 1.6% in April to June 2019, following growth of 0.8% in January to March 2019.

This placed the NW joint last (previous ranking third) 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, the region’s finance industry grew by 4.0% and was the largest positive contributor to growth whereas water supply; sewerage, waste management and remediation activities fell by 27.6%. In the main, the production sector was the main drag on growth with manufacturing falling by 7.3%.

Overall, the services sector grew by 0.4% but this was weighed down by the production, construction and agriculture sectors which fell by 8.3%, 5.4% and 2.0% respectively. Over the last two years the construction sector has had strong growth.

Productivity

Like most regions of the UK, output per hour in the NW was below the UK average. Productivity in the NW was 8.4% below the average which ranked the region fifth in the UK according to the ONS.

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 NW was also ranked fifth in terms of output per job. The region’s 15.8% 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 NW was ranked seventh as output per hour contracted by 0.4%. 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 and 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 increased by 4,000 to 157,000 between October and December; the slight uplift took the rate to 4.2%. 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 75.9% in the NW where 3.5m are employed; the UK rate was 76.5%.

In December, average earnings in the NW were unchanged at £595 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The NW was ranked sixth.

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 NW’s average property price decreased by 0.6% over the month to £166,003, the drop took the annual increase to 2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

The NW records the largest fiscal deficit in the UK, the region’s property prices jump and mini nuclear power stations in Cumbria

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, the NW had a deficit of £20.1bn, a lower shortfall than the £21.7bn recorded in 2018 but still the largest deficit in the UK. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the NW’s deficit was £2,762, lower than the £2,988 recorded in 2018. London had the highest surplus of £4,369 per person whereas Northern Ireland had the biggest shortfall at £4,978.

The only areas of the UK to run surpluses were London, the SE of England and the East of England. The West Midlands and the North East were the two regions in the UK to increase their net fiscal deficits over the year; the other seven regions reduced their shortfalls.

At a national level, the UK had a deficit of £623 per person which splits into deficits of £68, £2,713, £4,289 and £4,978 for England, Scotland, Wales and Northern Ireland respectively.

Public spending in the NW was £94.4bn or £13,560 per head, an increase on the 2018 figure of £92.7bn. London had the biggest spend of £123.9bn or £13,826 per head whereas Northern Ireland had the lowest at £27.9bn or £14,821 per head. Total government spending was £853bn or £12,835 per head.

The NW collected £74.1bn in taxes in 2019. London contributed the most to the Exchequer at £161.9bn, compared with the lowest contribution of £18.5bn which was from Northern Ireland. Overall the state raised £811.3bn or £12,213 per head in taxes an uplift of £34.1bn or £461 per head compared with 2018.

More data from the ONS showed unemployment in the NW increased by 6,000 to 154,000 between September and November 2019; the increase of 0.1% took the overall rate to 4.2%. Northern Ireland had the lowest rate at 2.3%, the North East the highest at 6.2% with the UK rate at 3.8%.

The South West had the highest employment rate at 79.8% which compared with 76.2% in the NW. UK employment was estimated at 76.3%.

NW average property prices jumped by 1.1% during November 2019 to £169,362, which took annual growth to 3.8%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

On development, Rolls-Royce plans to install and operate factory-built mini nuclear power stations by 2029. The power plants can be mass manufactured and delivered in sections by road.

The firm is confident that mini reactors can compete on price with renewables such as offshore wind and that between 10 and 15 of the stations in the UK could be viable. Former nuclear sites in Cumbria would be suited to build the small modular reactors (SMRs) which are about 1.5 acres in size.

A £13m museum highlighting Blackpool’s role in British entertainment will be based within the Sands Venue Resort Hotel – the town’s first five-star hotel – on the Golden Mile. The regeneration project hopes to attract c300,000 visitors annually and create the equivalent of 40 full-time jobs. Funding has come from the Northern Cultural Regeneration Fund (£4m), from the Coastal Communities Fund (£1.75m) and the Lancashire Growth Deal (£1.5m) amongst others.

On transport, the Office of Rail and Road (ORR) is investigating Network Rail over its poor service on routes used by commuter favourites Northern and TransPennine Express. Network Rail owns and operates rail infrastructure in England, Wales and Scotland.

The ORR said the proportion of scheduled train stops made on time in the last 12 months up to 4 January by Northern was 55% and 41% by TransPennine Express. This compares to the national average of 65%.

Early in January, Transport Secretary, Grant Shapps, announced he was evaluating a proposal from Northern Rail for options for continuing its franchise after the minister said the firm had the finances to continue only for a number of months. Then he surprisingly followed through and nationalised the firm, which consequently threw the Transpennine franchise into sharper focus.

On HS2, the Department for Transport and HS2 Ltd did not allow for all uncertainties when estimating initial costs the National Audit Office (NAO) has said. In 2015, HS2 was due to cost £56bn but a leaked government report suggested the total could reach £106bn. At this cost the decision whether to proceed or not will be taken at Prime Ministerial level next month.

On Merseyside, Jaguar Land Rover is cutting 500 jobs at its Halewood plant when it moves from three shifts to two a day. The factory makes the Evoque and Discovery Sport models and currently employs c4,000.

Administrators Deloitte have said 55 jobs will be lost in Alston, Cumbria, after they could not find a buyer for iron and steel castings producer the Bondshold Group. And in Nelson, Lancashire, packaging firm Mondi has announced plans to close its factory in the second half of 2020; 41 staff are affected. The plant creates bags, pouches and laminates for the consumer industry.

NW economic growth in 2018 ranked fourth, the Greater Manchester South West economy the fastest growing in the region but Sefton posts one of lowest GDPs per head in the UK, Cumbria’s LEP sinks down the rankings as the economy declines by 0.7%.

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Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its 2018 full year estimate of economic activity by UK country, region and local area using gross domestic product.

The figures showed the NW economy grew by 1.4% in 2018, down from the 2017 growth rate of 2.4%. This placed the NW fourth (2017 ranking also fourth) out of the twelve UK ‘regions.’

The UK and England growth rate in 2018 was also 1.4%. Growth in Wales was 1.3%, Scotland grew by 0.9% and the Northern Ireland economy shrank by 0.5%.

London topped the 2018 table with growth of 2.0% whilst Northern Ireland was at the bottom.

Within the region, the Greater Manchester South West economy grew the fastest at 4.9%, followed by Cheshire East at 4.5% and East Merseyside at 3.5%. Across the UK, the highest annual growth of sub national areas was in Falkirk at 10.5%.

Five areas of the region saw their GDP decline in 2018. The worst performer was the Wirral at -3.6% followed by Blackburn with Darwen at -2.9% and East Cumbria at -1.6%. In UK terms, the lowest annual growth of subnational areas was in Mid and East Antrim at -10.1%.

GDP per head growth of 4.1% to £37,067 was seen in Greater Manchester South West although Central Manchester was top at £44,781. GDP per head fell by 3.7% in the Wirral but at £17,850 Sefton posted the 5th lowest GDP per head in the UK, with Greater Manchester North East only two places better.

In terms of UK extremes, GDP per head was £395,309 in Camden and the City of London and £15,034 in Ards and North Down. These figures are a guide and are influenced by commuter flows.

In 2018, key drivers of the North West economy were mining at 11% and support services and information and communication both at 6%. Those areas that did not perform well were agriculture down by 8%, financial services down 4% and water supply and services also declined by 2%. Overall the services sector grew by 1.7% and production by 0.5% with construction declining by 0.1%.

The 2018 performance of the region’s enterprise partnerships was also highlighted by the ONS. Of the UK’s 45 development bodies, Greater Manchester LEP was ranked 13th in the UK (2017 ranking ninth) with growth of 1.7%, with Cheshire and Warrington ranked 15th and Liverpool City Region ranked 18th. The best regional performer was the Lancashire LEP at 22nd (2017 ranking 40th) with growth of 1.2%, but the Cumbria LEP slipped from 17th in 2017 to 41st in 2018 as the economy declined by 0.7%.

More data from the ONS showed unemployment in the NW fell by 10,000 to 146,000 between August and October 2019; the decrease of 0.2% took the overall rate to 4.0%. Northern Ireland had the lowest rate at 2.3% 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 80.8% which compared with 75.7% in the NW. UK employment was estimated at 76.2%.

NW average property prices fell by 0.6% during October 2019 to £166,134, which took annual growth to 1.4%. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

The NW economy ranked third, the region tops house price growth, and competition concerns on the West Coast mainline

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Ministers have called a halt to fracking following a report from the Oil and Gas Authority. The authority raised concerns about the ability to predict fracking-linked earthquakes.

Cuadrilla had already suspended work at its Preston New Road site in Lancashire after a series of tremors.

The effective moratorium will be maintained until new evidence is provided which addresses the concerns around the prediction and management of induced seismicity.

An assessment by the British Geological Survey in 2013 suggested there were enough resources in the Bowland resource across northern England to potentially provide up to 50 years of current gas demand.

On transport, West Coast Rail, a joint venture between FirstGroup and Italian firm Trenitali, will take over the running of the West Coast Mainline next month, replacing Virgin, which was barred from bidding.  FirstGroup also operates TransPennine Express which is Virgin’s only competitor on most of the northern part of the route.

The Competition and Markets Authority has raised concerns ticket prices could rise under the new franchise. The Authority said that on 21 routes, passengers would have little or no option but to choose a service run by FirstGroup. The Authority’s investigation into the new contract is ongoing.

TransPennine Express, has, however, unveiled a new £500m fleet of trains promising to increase capacity by 80% on routes in the North West. The investment over two years in the new Nova fleet will see 44 new trains run between Liverpool, Manchester, Newcastle and Edinburgh.

In September, a report by Transport for the North, found an increase in both late and cancelled services on TransPennine Express and Northern rail services compared with 2018. TPE blamed its worsening performance largely on weather events such as flooding and extreme heat.

Fewer than half of Northern rail services ran on time last month, the firm’s own figures have now shown. Only 45.4% of its trains arrived within a minute of their scheduled times between 11 October to 8 November.

Most commuters will put up with a short delay but cancellations for Northern are now at the highest level since late summer, with 5.2% of services abandoned, compared to 4.4% between July and August. Last month, Transport Secretary, Grant Shapps, mooted putting the company into public ownership if problems persist.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for the North West, the other eight English regions, and Wales, for the year to March 2019. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

The latest available figures showed the NW economy grew by 1.8%, up from 0.5% the previous quarter. This placed the NW sixth (previous ranking tenth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.2% whilst at the bottom the Yorkshire and Humberside economy declined by 0.3%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also highlighted that the quarter to March 2019 was far better for the region than the previous quarter. The North West economy grew by 1.0% in January to March 2019, following negative growth of 0.2% in October to December 2018.

In this period, the manufacturing industry grew by 6.7% and was the largest positive contributor to growth whereas education fell by 4.7%. Overall the services sector was the only drag on growth. The other three sectors, agriculture, production and construction, contributed positively.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the NW third (previous ranking fourth)  with growth of 1.7%, which suggests the region has had a better summer relative to other parts of the UK.

Using this metric, UK growth was 1.45%. Growth in London (ranked first) was 2.32%, which compared with the South West of England (bottom) at 0.41%

More data from the ONS showed unemployment in the NW fell by 5,000 to 153,000 between July and September; the small decrease of 0.1% took the overall rate to 4.2%. Northern Ireland had the lowest rate at 2.5% with the UK rate at 3.8%. The highest rate was 5.9% which was recorded in the North East.

The South West had the highest employment rate at 81.0% which compared with 75.3% in the NW. UK employment was estimated at 76.0%.

In September, average earnings in the North West were up by £20 to £595 per week. London had the highest average earnings of £830. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

NW average property prices fell by 0.3% to £167,683, which took annual growth to 2.8% which was the highest in Great Britain. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

Significant NW house price growth, HS2 concerns and North Westerners feel less anxious

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Unemployment in the NW decreased by 2,000 to 148,000 between June and August, which left the overall rate at 4.1%.

The South West continued to record the lowest rate at 2.4% with the UK rate at 3.9%. The highest rate was 5.8% which was recorded in the North East.

The South West also had the highest employment rate at 81.0% which compared with 74.5% in the NW. UK employment was estimated at 75.9%.

NW average property prices increased by 1.3% to £168,221, which took annual growth to 3.1%, which was the second highest in England. In comparison, UK prices grew by 0.8% to £234,853 during August, an annual growth rate of 1.3%.

Analysis by the BBC has found workers living in seaside areas in Great Britain earn on average £1,600 less per year than those living inland. Since 2010 wages fell by c25% in real terms in Wirral West, the biggest drop in the UK.

Overall, in coastal constituencies median wages were £22,104 compared with £23,785 in non-coastal areas. Despite this, average pay in the Wirral is c£30,000, close to the UK average and higher than the regional norm.

The ONS’s Personal Well-being (or Happiness) Index has ranked the NW third out of the 12 UK ‘regions’, only Londoners and Geordies’ happiness improved more. Average anxiety has also improved most in the NW over the last six years.

Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

A National Audit Office (‘NAO’) report has highlighted that rolling out fracking in England has been slower than expected. In 2016, the government forecast that up to 20 wells would be fracked by mid-2020, but only three have been operational. Two of the functioning wells are in Lancashire.

The industry told the NAO that slow progress on fracking was partly due to the need to halt fracking activity if there is a tremor greater than 0.5 on the Richter scale. This compares with 4.0 in the US where the technology has revolutionised the US energy industry.

A key scientific assessment of recent industry data by the Oil and Gas Authority is highly anticipated. The UK has spent £32.7m supporting fracking since 2011.

Nothing highlights the need for regeneration more than a derelict theme park, and the deserted Frontierland in Morecambe is no exception. Plans to set up a £17m retail park, hotel and pub were approved in 2015 but now Lancaster City Council has asked developers their intentions after time to complete the project expired.

In Manchester, plans to create the first public park for more than 90 years have been submitted to the city council. Mayfield Park would be a 6.5 acre public space close to Piccadilly station and part of a £1.4bn plan to regenerate a run-down area south of Fairfield Street. Work is expected to start in 2020 and will take up to 15 years to complete.

If a derelict theme park signals a regeneration need, does a city obtaining its first Michelin star restaurant suggest ‘job done?’ Manchester now has its first Michelin star restaurant in more than 40 years. The French, in The Midland Hotel, had a star from 1974 until 1977, but now Mana, in Ancoats, has been awarded one.

Transport

The Northern Powerhouse Partnership’s Independent review into HS2 ‘HS2 North’ was introduced in Parliament this month by the Northern Powerhouse All Party Parliamentary Group.

The key recommendation of the report is the establishment of HS2 North, a private sector special purpose vehicle modelled on the Olympic Delivery Authority which would integrate HS2 and Northern Powerhouse Rail.

HS2 North would be arms-length from government, contracting with private sector delivery partners and Network Rail, and overseen by Transport for the North.

Whilst no one doubts that HS2 will bring significant benefits to the Northern economy, this report, and a second Northern Powerhouse Partnership report, ‘HS2 and the Economy of the North’, identifies that further detailed work needs to be undertaken to pin down the economic benefits that the new line would bring.

Separately, CBI East Midlands, West Midlands, Yorkshire and Humber, London, the North East and North West regional directors also urged the government to build the HS2 rail project in full.

However, a paper by the Adam Smith Institute, also released this month, claims that HS2 will deliver limited benefits and that some Northern cities could lose direct trains to London.

The instead recommends upgrading existing routes with new signalling, doubling the number of tracks, reopening mothballed lines, building new sections of railway and targeting bottlenecks at key junctions.

Also on the trains, the government is considering whether the management of Northern Rail should be taken into public hands. The Department for Transport confirmed it was developing contingency plans with either a new short-term management contract with Northern or the Operator of Last Resort (‘OLR’) (effectively the Government).

The OLR is currently in charge of London North East Railway, the East Coast Mainline intercity franchise. Northern is a large, more complex commuter network, so the government is likely to take-on a more supervisory role, with Northern still able to run day-to-day services and take the blame.

In a bad month for Northern, politicians demanded that passengers still having to use the 1980s-built rail-buses called Pacer trains, should be offered reduced fares. Northern had planned to withdraw them all by the end of this year but some will be retained into 2020 as a result of delays in the construction and delivery of new trains from manufacturer CAF.

The Pacers, a joint venture between British Rail and British Leyland, were originally constructed from the body of a bus and were intended to have a maximum lifespan of 20 years. In fairness though, the Pacer is a survivor, other British Leyland vehicles from the 1980s like the Austin Maxi and Morris Marina have long gone.

Jobs

Plans to redevelop Santander’s Bootle base into a £75m complex have been approved. The Merseyside site will become the bank’s contact centre and UK operations hub from 2022, employing more than 2,500 staff.

The existing Bootle site, originally GiroBank’s HQ from 1968, will be demolished to make way for the environmentally sustainable complex which will accommodate sporting and social facilities.

In Blackpool, c100 staff at The Silver Line, a charity set up by Dame Esther Rantzen in 2013 to combat loneliness among the over-65s, have been safeguarded following a merger with Age UK.

The Silver Line receives over 10,000 calls a week, and its befriending services support 2,000 older people.