The State of Britain

SW

The SW economy weathers the second lockdown better than most other UK regions

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A nowcast for the SW 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 SW economy contracted by 9.7%.

This ranked the SW second in the UK (previous ranking third). Over the same period the East Midlands was ‘best’ with a fall of 9.4%, 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 SW post growth of 0.2% compared with 19.9% to September 2020.

This placed the SW tenth (previous ranking first) 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 SW’s best sector was manufacturing at 3.7% whilst accommodation fell by 19.8%. Production, Construction and Services were 2.8%, 2.9% and -0.5%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region fell by 10,000 to 103,000 between March and May 2021; the drop of 0.4% took the rate to 3.7%. At 6.5% London had the highest rate; 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 77% in the SW where 2.7m are employed; the UK rate was 74.7%.

Public sector employment in the SW increased by 4.1% to 465,000 in the year to March 2021, which was 17.2% 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 grew by 1.9% in the SW which ranked the region fourth 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 increased by 0.4%.

Research and Development

The region attracted £2.6bn of R&D spend in 2019, up from £2.5bn in 2018. This ranked the SW seventh in the UK (previous ranking seventh). 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 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 SW’s average property price fell by 0.6% in May to £277,063. The drop took the annual increase to 8.4%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.

The South West’s economy grows by a UK best of 19.9%

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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 SW’s growth was -5.2% compared with -21.4% the previous quarter. This placed the SW third (previous ranking fifth) 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 SW post growth of 19.9% compared with -18.9% in April to June 2020.

This placed the SW first (previous ranking seventh) out of the twelve UK ‘regions’; London was bottom, posting growth of 13.3%; UK growth was 16.9%.

In this period, the SW’s best sector was accommodation at 307% compared with mining at -5.6%. Production, Construction and Services were 22%, 49% and 18%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was 17,000 lower at 110,000 between January and March; the drop of 0.2% took the rate to 3.9%. 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 76.7% in the SW where 2.7m are employed; the UK rate was 75.2%.

Public sector employment in the SW increased by 3.3% to 458,000, which was 16.8% 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 SW grew to £654 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 SW’s average property price increased by 2.6% in March 2021 to £287,650. The uplift took the annual increase to 10.9%. In comparison, UK prices grew by 1.8% to £256,405 during March, an annual growth rate of 10.2%.

The South West weathers the pandemic better than most UK regions and economic performance over 5 years is above average

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A nowcast for the SW for the 12 months ended December 2020, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the SW economy contracted by 9.6%. This ranked the SW third in the UK.

Over the same period the East Midlands was ‘best’ with a fall of 8.9%, with London’s 12.9% contraction 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 SW was ranked fourth.

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 SW’s growth was -21.4% compared with -1.7% the previous quarter. This placed the SW fifth (previous ranking third) 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 SW post growth of -19.1% compared with -2.8% in January to March 2020.

This placed the SW seventh (previous ranking also seventh) out of the twelve UK ‘regions’. Northern Ireland was top with quarterly growth of -13.6% whilst the West Midlands was bottom, posting growth of -21%. UK growth was -18.8%.

In this period, the SW’s best sector was public administration at -1.3% whilst accommodation fell by -75.2%. Production, Construction and Services were -21.5%, -38.5% and -17.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was 11,000 higher at 127,000 between October and December; the uplift of 0.4% took the rate to 4.5%. 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 76.9% in the SW where 2.6m are employed; the UK rate was 75%.

Public sector employment in the SW increased by 3.8% to 455,000, which was 16.7% 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 SW dropped to £621 per week. London had the highest average earnings of £862 and 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 SW’s average property price increased by 2.3% in December 2020 to £282,388. The uplift took the annual increase to 10.2%. In comparison, UK prices grew by 1.2% to £251,500 during September, an annual growth rate of 8.5%.

The SW economy shrinks by 5% but house prices are uplifted by 6.4%

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A nowcast for the SW 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 SW economy contracted by 7.8%.

This ranked the SW fourth in the UK and suggests the regional economy has so far coped ‘better’ 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 SW’s GDP relative to the end of 2019 is about -5%. 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 SW growth was -1.7% compared with +1.1% the previous quarter. This placed the SW third (previous ranking second) 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 SW post growth of -2.8% compared with +0.8% in October to December 2019.

This placed the SW seventh (previous ranking first) 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 SW’s best sector was education with growth of 0.7% but electricity fell by 10.6%. Production, Construction and Services were -4%, -6.3% and -2.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 9,000 higher at 116,000 between July and September; the uplift of 0.3% took the rate to 4.1%. 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 76.5% in the SW where 2.7m are employed; the UK rate was 75.3%.

Housing

The SW’s average property price increased by 3.3% in September 2020 to £275,376. The uplift took the annual increase to 6.4%. 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 4.9% following lockdown but data for an earlier pre-pandemic period shows the region outperforming all parts of the UK

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A nowcast for the SW 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 SW economy contracted by 4.9%.

This ranked the SW second 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’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 SW, 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 SW grew by 1.1%, an uplift on 0.6% the previous quarter. This placed the SW second (previous ranking seventh) 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 an improving picture in the SW with the data better than the previous quarter. The SW economy grew by 0.8% in October to December 2019, following +0.4% in July to September 2019.

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

The SW was top of the table but the North East was bottom, posting a drop of 1.3%.

In this period, the SW’s best sector was administrative support with growth of 7% but information fell by 4.1%. Overall production was +1.8%, construction +0.9%, services +0.6% and agriculture -0.1%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 14,000 higher at 102,000 between April and June; the uplift of 0.5% took the rate to 3.6%. 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 78.1% in the SW where 2.8m are employed; the UK rate was 76.4%.

Housing

The SW’s average property price fell by 2.5% in April 2020 to £255,891. The drop took the annual increase to 1.2%. 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%.

Regional job losses mount up, Dorset incomes the highest and SW private sector rents increase the most in the UK

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The SW aerospace industry continues to be buffeted by the pandemic. 

At Filton, 295 jobs are threatened at Airbus with a further c1,000 indirect jobs at risk in the regional supply chain.  

Rolls Royce has also 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, of these c50 roles will go in Bristol. Voluntary redundancies will be available in Civil Aerospace and the scheme is also open to some of the Bristol-based workforce engaged in Manufacturing, Assembly and Test.

In the arts, The Theatre Royal in Plymouth warned that 100 of its 350 jobs were at risk. The income of the Devon theatre has reduced by 91% since lockdown began

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 SW was fourth at £20,907.

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 SW was Dorset with incomes of £22,738. This ranked the area 38th out of 179 districts of the UK.

The poorest areas of the region were Plymouth at £17,555, beating Torbay at £18,412. Plymouth was ranked 126th in the UK, Nottingham and Leicester were bottom.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%. SW growth was third at 5%.

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

In the SW, income growth in Bournemouth was the second highest in the UK at 6.8% with Wiltshire a regional second and UK seventh at 6.3%. Torbay was the worst regional performer with growth of 2.1%, a ranking of 173rd.

Labour

More data from the ONS showed unemployment in the region was 1,000 lower at 86,000 between February and April; the drop left the rate unchanged at 3.0%. 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 78.9% in the SW where 2.8m are employed; the UK rate was 76.4%.

Public sector employment in the SW increased by 2.8% in March to 448.000, which was 16.2% 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 SW increased by £26 to £608 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 SW rental prices ranged from £595 to £895 with £725 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%.

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 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 SW is forecast to have 2.6m households by 2028.

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

The South West economy shrinks by 1.7% following lockdown and pre-pandemic data shows modest growth

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A quarterly nowcast for the SW 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 SW economy contracted by 1.7%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the SW fifth and suggests the regional economy has so far coped averagely with the pandemic relative to the other eleven ‘regions’ of the UK. Over the same period the East Midlands was ‘best’ with a fall of 1% 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 SW growth has dropped from 0.6% to -0.4%.

This ranked the SW tenth (previous ranking eleventh) 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 reflects Brexit uncertainty rather than Covid 19 turmoil, show the region holding its position 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 fourth estimate for the SW, 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 SW grew by 0.6%, a slight improvement on 0.5% the previous quarter. This placed the SW seventh (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 1.2%. The West Midlands was the worst performer and contracted by 1.5%. The East of England and the North West were the other two ‘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 showed an improving picture in the SW with the data better than the previous quarter. The SW economy grew by 0.3% in July to September 2019, following -0.7% in April to June 2019.

This placed SW seventh (previous ranking eight) out of the twelve UK ‘regions’. 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% with the East Midlands posting a drop of 0.3%.

In this period, the SW’s best sector was information/communications with growth of 6.4% but electricity/gas/steam/air fell by 4%. Overall services grew by 0.6% and construction by 1.7% but production fell by 1.5% and agriculture by 2.3%.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the region was 8,000 higher at 88,000 between January and March; the uplift of 0.3% took the rate to 3.1%. 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 79.2% in the SW where 2.8m are employed; the UK rate was 76.6%.

Housing

The SW’s average property price increased by 2% over the month to £263,360. The uplift took the annual increase to 4.1%, the second best in England. 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 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.

The USA the SW’s largest export market but volumes decline, Swindon imports the most services and an increase in unemployment sees the region overtaken by the SE

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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 the annual export value in the SW along with five of the 12 UK ‘regions’. The SW’s exports decreased by 1.1% or £243m to £21.2bn which was 6% 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% with Yorkshire & The Humber falling by 6.3%

There was an increase in the annual import value in the SW along with five of the 12 UK ‘regions’. The SW’s imports increased by 0.9% or 206m to £24bn 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 SW’s largest export market with machinery & transport equipment the best export. Most of the SW’s imported goods also came from the USA with machinery and 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 SW imported £10bn of services value in 2017 of which £3bn was travel. The largest importer of services was London at £60bn with Northern Ireland importing £1.6bn.

At a local level, the leading 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 SW, Swindon imported £1.1bn of non-travel services compared with £63m in Torbay.

The data on services exports was released by the ONS last year which showed the SW exporting £13bn 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 SW posting a 1.3% drop to £3.4bn.

The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with a 0.9% fall. Within construction though 5620 new houses were completed in the SW, an increase of 12% on the previous quarter.

More pre-pandemic data from the ONS showed unemployment in the region was 10,000 higher at 91,000 between December and February; the uplift of 0.3% took the rate to 3.1%. 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 79.4% in the SW where 2.8m are employed; the UK rate was 76.6%.

The SW’s average property price increased over the month by 0.5% to £258,044. The uplift took the annual increase to 1.1%. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%

The Henleaze and Barton Hill areas of Bristol are the wealthiest and poorest areas of the region, Cornwall LEP records the second best productivity growth in the UK and the SW loses its employment crown

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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.

The wealthiest area of the SW was the Henleaze area of Bristol with £40,600. This ranked the area 147th out of the 7,201 areas recorded. The poorest area of the region was also in Bristol, Barton Hill, with £15,600. This area was ranked 7,155 out of the 7,201 areas of the UK recorded.

Like most regions of the UK, output per hour in the SW is below the UK average. Productivity per hour in the region was 9.8% below the UK average which ranked the region sixth 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 the SW’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.

At 10% above, the Swindon and Wiltshire LEP was one of eight economic regions which beat the UK average and was ranked 4th, the region’s other LEPs recorded productivity below the UK average. West of England was 11th at 1% below, the other four LEPs all performed poorly and ranged from 11% to 24% below the UK average. Dorset, Gloucestershire and Heart of the South West LEPs were ranked 26th, 27th and 34th. Cornwall at 24% below was ranked 43rd, the second worst in the UK.

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 SW’s results for productivity growth were more mixed. With growth of 10% the Cornwall LEP was the second best in the UK. The Swindon and Wiltshire LEP was ranked 14th nationally with growth of 4%, beating the Heart of the South West which was ranked 22nd with 2% growth. West of England was a little behind at 25th with Dorset at 0% growth which ranked it 33rd.  The only one of the region’s LEPs which recorded productivity levels lower in 2018 than 2010 was Gloucestershire at -8%. The ranking of 43rd only beat Buckinghamshire Thames Valley LEP.

Despite this all of the SW’s four subregions recorded productivity below the UK average. Gloucestershire, Wiltshire and Bath/Bristol area -1%, Devon -16%, Dorset and Somerset -16% and Cornwall and Isles of Scilly -18%.

At a county level, with the exception of Swindon (+40%) and Bath and North East Somerset, North Somerset and South Gloucestershire (+7%) all of the SW’s economic regions recorded productivity below the UK average. Torbay had the lowest productivity, 26% below the UK average.

The growth in hours worked between 2010 and 2018 in Gloucestershire, Wiltshire and Bath/Bristol area was 13%, beating Dorset and Somerset which recorded 12%. In UK terms this level of growth was in the top half of the country’s 40 subregions. Cornwall and Isles of Scilly grew 7% and Devon grew 6% which ranked them in the bottom ten of the UK.

If the increase in economic output is also factored in then the sub regional performances are good, mirroring the region’s LEPs. Cornwall and Isles of was ranked 3rd in the UK with growth of 10%, Devon was placed 18th with 3%, Dorset and Somerset 25th with 2%  and Gloucestershire, Wiltshire and Bath/Bristol 32nd with 0.4%. 

More data from the ONS showed unemployment in the region was 10,000 higher at 87,000 between November and January; the uplift of 0.3% took the overall rate to 3.0%, the second best in the UK. 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 overtook the region and had the highest employment rate at 80% which compared with 79.9% in the SW where 2.8m are employed; the UK rate was 76.5%.

The SW’s average property price decreased by 1.8% to £254,320, which took the annual decrease to 0.1%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

A slight increase in growth shifts the region off the bottom of the national rankings, SW productivity contracts but regional employment still the best in the UK

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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 the SW’s growth has uplifted from 0.4% to 0.6%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the SW eleventh (previous ranking twelfth) and suggests the region has marginally improved 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%.

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 SW 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 SW economy grew by 0.6%, down from 1% growth the previous quarter. This placed the SW seventh (previous ranking tenth) 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’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to June 2019 was much worse for the region than the previous quarter. The SW economy contracted by 0.6% in April to June 2019, following growth of 0.9% in January to March 2019.

This placed the SW eighth (previous ranking second) 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, finance and administrative/support service activities both grew by 3.4% and 3.5% respectively but education and manufacturing fell by 4.4% and 2.3%.

In general all sectors in the SW fell, with construction, production, agriculture and services falling 2.3%, 2.2%, 1.3% and 0.2% respectively. Growth in the last two years in the services sector has remained stable relative to 2017 but the construction sector has fallen steadily since Quarter 4 (Oct to Dec) 2017.

Productivity

Like most regions of the UK, output per hour in the SW was below the UK average. Productivity in the SW was 9.8% under the norm which ranked the region sixth 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 SW moved down the rankings to eighth in terms of output per job. This means that on average workers in the SW 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 SW was ranked eighth as output per hour contracted by 0.7%. 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%.

Sectorally, productivity in administrative/support services was better than expected but arts/entertainment/recreation 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 5,000 to 80,000 between October and December; the uplift of 0.2% took the rate to 2.8%. 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.

Despite a drop of 62,000 the South West still had the highest employment rate at 80.1% or 2.8m in employment; the UK rate was 76.5%.

In December, average earnings in the SW fell by £13 to £582 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The SW was ranked seventh (previous ranking fifth).

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 SW’s average property price increased by 1.3% over the month to £262,286, the uplift took the annual increase to 2.2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.