The State of Britain

WALES

The country’s economy shrinks by 6.8% following lockdown and data for an earlier pre-pandemic period also shows a contraction but house prices surge

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A nowcast for Wales 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 country’s economy contracted by 6.8%.

This ranked the country eleventh in the UK and suggests the country’s economy has so far coped ‘poorer’ 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 contraction the ‘worst’ at 7.4%; the UK’s 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 country’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 nine 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 that the economy in Wales contracted by 0.5%, down from +1.7% the previous quarter. This placed the Wales eighth (previous ranking third) 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 ‘regions’ in the UK to suffer a decline.

In the same report, the ONS’s figures highlighted that the standalone quarter to December 2019 showed a worsening picture in Wales with the data poorer than the previous quarter. The country’s economy contracted by 1% in October to December 2019, following +0.7% in July to September 2019.

This placed Wales eleventh (previous ranking fifth) out of the twelve UK ‘regions. Wales was one of seven regions of the UK that saw their economies contract 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, Wales’s best sector was the arts with growth of 2.5% but information fell by 11.6%. Overall production was -0.9%, construction +0.4%, services -1.1% and agriculture -0.2%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the country was 8,000 lower at 41,000 between April and June; the drop of 0.5% took the rate to 2.7%. 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 75.3% in Wales where 1.5m are employed; the UK rate was 76.4%.

Housing

Wales’s average property price increased by 0.6% in April 2020 to £169.489. The uplift took the annual increase to 5%. 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%.

Big job cuts forecast in the aviation sector and incomes in Monmouthshire the best in Wales

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The impact of the pandemic on the Welsh hospitality and aviation sectors has continued.

Carmarthenshire food wholesaler/processor Castell Howell Foods is considering job cuts as weekly sales are down 65% due to a drop in hospitality trade; 700 jobs are at risk.

Aerospace Wales, the body representing the industry, has warned that the pandemic could cost the sector up to 8,000 jobs. For example, the Unite union claims 240 jobs could be lost at the Magellan aerospace factory in Wrexham. The Canadian firm supplies components to companies like Airbus which has itself announced cut jobs.

Airbus has said its UK cuts would fall in the commercial aircraft division at its two sites at Broughton in Flintshire and Filton, Bristol; 1700 jobs are at risk.

In Powys, a Laura Ashley factory is to close next month, with the loss of 57 jobs. A management buyout of the Texplan warehouse and call centre in Newtown has been unsuccessful following the furniture and fashion chain’s collapse into administration in March.

More positively, plans to build a plasterboard factory at Newport Docks have been approved by the city council, creating 70 jobs with a further 130 jobs in the supply chain.. Associated British Ports (ABP) will set up the plant on vacant land to the south west of the port’s South Dock.

At Pembroke Dock, a £60m marine power project has been approved with 1,800 jobs expected to be generated over the next 15 years. The project will enable technology developers to test marine energy devices in the Milford Haven Waterway.

A £100m expansion at toilet tissue manufacturer WEPA’s Bridgend Paper Mill will also create 70 new jobs. The firm makes almost 2m loo rolls daily.

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. Wales had £17,100.

At a local level, Kensington and Chelsea and Hammersmith and Fulham 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 Wales was Monmouthshire and Newport with incomes of £18,896. This ranked the area 100th out of 179 districts of the UK. In comparison, the lowest incomes in London were in Barking at £20,673.

The poorest areas of the country were Gwent Valleys at £15,587, lower than Swansea at £15,755. Gwent Valleys was ranked 167th 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%. Wales grew by 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 Wales, income growth in Flintshire and Wrexham was top at 5.6% with Powys second at 5.5%. Gwent Valleys was again the worst regional performer with growth of 2.9%, a ranking of 163rd.

Labour

More data from the ONS showed unemployment in the country fell by 4,000 to 47,000 between February and April; the drop of 0.3% took the rate to 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 again at 79.5% which compared with 74.4% in Wales where 1.5m are employed; the UK rate was 76.4%.

Public sector employment in Wales increased by 1.3% in March to 297.000, which was 21.0% 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 Wales fell by £18 to £548 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.

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 of England, up by 2.5%, with the lowest price growth in the North East of England at 0.8%, Wales recorded 1.2%.

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

Following lockdown the Welsh economy shrinks by 2.5%, the third fastest fall in the UK, pre-pandemic data shows improving growth

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A quarterly nowcast for Wales 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 Welsh economy contracted by 2.5%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked Wales tenth and suggests the economy has so far coped poorly 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 Welsh growth has dropped from 0.8% to -0.5%.

This ranked Wales eleventh (previous ranking tenth) and suggests the country has largely held its low 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 country’s ranking unchanged (third) 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 Wales and the other nine English regions. 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 Welsh economy grew by 1.7%, a drop on 2% the previous quarter. This placed Wales third (previous ranking also third) 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 Wales with the data better than the previous quarter. The Welsh economy grew by 0.9% in July to September 2019, following -0.1% in April to June 2019.

This placed Wales fourth (previous ranking fifth) 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 North West and Northern Ireland contracted by 0.2%, with the East Midlands posting a drop of 0.3%.

In this period, Wales’s best sector was information with growth of 12.7% but the arts/entertainment sector fell by 6.9%. Overall services grew by 1.5%, construction by 2.6% and agriculture by 0.8% but production fell by 1.3%.

Labour

More largely pre-pandemic data from the ONS showed unemployment in the country was 4,000 higher at 49,000 between January and March; the uplift of 0.3% took the rate to 3.2%. 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 74.3% in Wales where 1.5m are employed; the UK rate was 76.6%.

Housing

The country’s average property price decreased by 2.8% over the month to £161,684. The fall took the annual increase to 1.1%. 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.

Welsh exports increase with Germany the country’s largest market, the construction sector dips and Anglesey and the Western Isles import the least services in the UK

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

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

There was an increase in the annual export value in Wales along with five of the 12 UK ‘regions’. Welsh exports increased by 3% or £516m to £17.7bn which was 5% of the UK total.  The increase took Wales above Yorkshire & The Humber to ninth in the UK rankings.

The leading regional exporter remained the SE at £46bn with Northern Ireland the smallest at £9bn. The best performer in percentage terms was London which was up by 17.2% with Yorkshire & The Humber falling by 6.3%.

There was a decrease in the annual import value in Wales along with five of the 12 UK ‘regions’. Welsh imports fell by 1.3% or 233m to £18bn which was 4% 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% to imports compared with Scotland which reduced imports by 7%.

Germany was Wales’s largest export market with machinery & transport equipment the best export. Most of Wales’s imported goods 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.

Wales imported £5bn of services value in 2017 of which £2bn was travel. The leading importer of services was London at £60bn with Northern Ireland importing £1.6bn.

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

In Wales, Cardiff and Vale of Glamorgan imported £556m of non-travel services compared with Anglesey.

The data on services exports was released by the ONS last year which showed Wales exported £8bn of services. London exported the most services at £117bn which compared with 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 Wales posting a 4.5% drop to £1.7bn. The biggest decrease in the UK was 4.6% in the West Midlands; the SE was best with a 0.9% fall.

More pre-pandemic data from the ONS showed unemployment in the country was 10,000 higher at 56,000 between December and February; the uplift of 0.7% was the biggest in the UK and took the rate to 3.7%. Northern Ireland had the lowest rate of 2.5% with 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 74% in Wales where 1.5m are employed; the UK rate was 76.6%.

Welsh average property prices increased the most in the UK over the month by 1.2% to £164,435. The uplift took the annual increase to 3.4%, the highest in the UK. In comparison, UK prices dropped by 0.6% to £230,332 during February, an annual growth rate of 1.1%.

The wealthiest area of Wales was Sketty in Swansea, the poorest was east Cardiff, all of the country’s economic regions record productivity below the UK average

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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 at £12,500. The two areas are 30 miles from each other and ranked 7200 places apart.

The wealthiest area of Wales was Sketty in Swansea with £39,600. This ranked the area 203rd out of the 7,201 areas recorded. The poorest part of the country were areas of eastern Cardiff with £13,900. This area was ranked 7,195 out of the 7,201 areas of the UK recorded.

Like most regions of the UK, output per hour in Wales is below the UK average. Productivity per hour in the country was 17% below the UK average which ranked the country bottom 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 Welsh 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.

Unsurprisingly all three of the country’s economic regions recorded productivity below the UK average. South East Wales was the best and was ranked 22nd at 10% below, North Wales and Mid and South West Wales were ranked 41st and 42nd at c13% below. Only Cornwall and the Black Country LEPs were ranked lower.

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 country’s results for productivity growth were more mixed. With growth of 5% South East Wales was the eleventh best in the UK and Mid and South West Wales ranked 16th nationally with growth of 3%. But North Wales recorded productivity levels lower in 2018 than 2010; at -4% the region was ranked 40th.

The country’s two subregions recorded productivity below the UK average with East Wales 14% below and West Wales and The Valleys -20%.

At county level, all Wales’s economic regions recorded productivity below the UK average, the only part of the UK to do so. Cardiff and the Vale of Glamorgan was the best at -4% with Powys the lowest in the UK at -43% below the UK average.

The growth in hours worked between 2010 and 2018 in East Wales was 14%, beating West Wales and The Valleys which recorded 8%. The level of growth in East Wales ranked eleventh in the UK’s 40 subregions.

If the increase in economic output is also factored in then the sub regional performances are reasonable. West Wales and The Valleys was ranked 16th in the UK with growth of 4% and East Wales was placed 27th with 2%.

More data from the ONS showed unemployment in the country was 3,000 lower at 51,000 between November and January; the 0.2% drop took the overall rate to 3.3%. Northern Ireland had the lowest rate of 2.4%, the NE 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 74.4% in Wales where 1.5m are employed; the UK rate was 76.5%.

The Welsh average property price fell by 2.9%, the biggest drop in the UK, to £161,719, which took the annual increase to 2.0%. In comparison, UK prices decreased by 1.1% to £231,185 during January, an annual growth rate of 1.3%.

Welsh growth slows and the country drifts down the rankings, productivity contracts and is the worst in the UK but Welsh unemployment at a record low

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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 Welsh growth has fallen from 1.3% to 0.8%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the country tenth (previous ranking sixth) and suggests the Welsh economy has not performed well 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 more mixed. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the nine 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 highlighted that Wales grew by 0.7%, down from 2.6% growth the previous quarter. This placed the country fifth (previous ranking third) 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 better for Wales than the previous quarter. The Welsh economy grew by 0.4% in April to June 2019, following a contraction of 0.6% in January to March 2019.

This placed the country fourth (previous ranking twelfth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%. The WM was the worst performer in Q2 with -1.6% whereas London was the best with +1%.

In this period, Welsh transportation/storage grew by 78.6% but manufacturing and human health/social work fell by 4.3% and 3.3% respectively.

Overall the agriculture and services sectors grew by 3.8% and 2.0% respectively, while the construction and production sectors fell by 6.7% and 3.0%. The agriculture and services sectors have seen steady growth relative to 2017, whilst construction has dipped since Q4 2018 and the production sector has fallen since late 2017.

Productivity

Like most regions of the UK, output per hour in Wales was below the UK average. Productivity in the country was 17.2% under the norm which ranked the ‘region’ last 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 elevated productivity pulls up the UK average so much that all other regions fall below it.

Wales was also last in terms of output per job. The country’s 18.2% 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. Wales was ranked tenth as output per hour contracted by 1.0%. 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 accommodation/service activities was better than expected but non-manufacturing and agriculture 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 Wales fell by a big 14,000 to 45,000 between October and December; the drop of 0.9% moved the overall rate down to a record low of 2.9%. 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 still had the highest employment rate at 80.1% which compared with 74.4% or 1.5m in employment in Wales; the UK rate was 76.5%.

In December, average earnings in the country increased by £39 to £566 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. Wales was ranked tenth (previous ranking twelfth).

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

Welsh average property price fell by 2% over the month to £165,735; the drop 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%.

A big drop in the Welsh jobless rate, a significant uplift in house prices and losses continue to mount up at Cardiff airport

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In the ONS’s estimate of regional public spending and regional tax revenues in 2019, Wales had a deficit of £13.4bn, a smaller shortfall than the £14.2bn recorded in 2018. This compared with London, which had the highest surplus of £38.9bn.

On a per person basis, the Welsh deficit was £4,289, lower than the £4,552 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 Wales was £43bn or £13,698 per head, an increase on the 2018 figure of £42.4bn. 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.

Wales collected £29.5bn 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 Wales fell by 18,000 to 46,000 between September and November 2019; the whopping decrease of 1.2%, the biggest drop in the UK, took the overall rate to 3.0%. Northern Ireland had the lowest rate at 2.3% with the UK rate at 3.8%.

The South West had the highest employment rate at 79.8% which compared with 74.9% in Wales. UK employment was estimated at 76.3%.

Welsh average property prices increased by a huge 3.5% during November 2019, the uplift to £172,574, increased annual growth to make it a UK outlier of 7.8%. In comparison, UK prices increased by 0.4% to £235,298 an annual growth rate of 2.2%.

On transport, a Welsh Government spokesman has said state owned Cardiff Airport adds c£250m GVA to the Welsh economy and sustains around 2,400 aviation related jobs.

Last year a new tax payer loan was announced bringing the total amount of cash the airport can borrow from the Welsh Government to £59.4m. Most of the original loan of £38.2 has already been drawn down according to officials, which suggests the new £21.2m blurs the line between investment and working capital. 

Its latest accounts show the airport made a pre-tax loss of £18.5m in 2018/19 and barely recorded a positive EBITDA figure. Welsh ministers paid another £52m in 2013 to buy the airport.

At c£80m of public money already deployed to keep the airport operating, and with a further £21m now at risk, the economic case looks increasingly thin.

On jobs, a new buyer has not been found for Bangor based The Book People and administrators PwC say 155 people have been made redundant. The business was founded in 1998 and employed 393 people last month. The firm has offices in Bangor and Godalming, Surrey. PwC said 82 of the 142 staff at the Bangor office have lost their jobs.

Increased digitalisation has put 26 jobs at the Molson Coors call centre at risk. The brewer, which owns brands including Carling, Worthington, Sharp’s and Cobra, employs 132 people at Cardiff Gate Business Park.

And in Deeside, Flintshire, packaging firm Mondi has announced plans to close its factory in the second half of 2020; 167 staff are affected. The plant creates bags, pouches and laminates for the consumer industry.

Also Liberty Steel is cutting 72 staff in Newport, with a further 282 jobs going in south Yorkshire. The announcement follows Tata Steel’s plans to shut its Orb plant, near to Liberty Steel, in September 2020, putting up to 380 jobs at risk.

Last November, Tata announced plans to cut 3,000 jobs across Europe of which c1,000 could be in Wales. Tata Steel’s pre-tax losses were £371m last year, up from £222m in 2017-18.

Wales records above average growth in 2018, Monmouthshire and Newport the best for Welsh growth, three areas of Wales in the UK bottom ten for GDP per head; more recent data highlights the country’s strong property market

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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 Welsh economy grew by c1.3% in 2018, similar to the 2017 growth rate. This placed Wales fifth (2017 ranking tenth) out of the twelve UK ‘regions.’

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

Within the country, the Monmouthshire and Newport economy grew the fastest at 5.2%, followed by Bridgend and Neath at 4.5% and Anglesey at 4.0%. Across the UK, the highest annual growth of the 179 local areas was in Falkirk at 10.5%.

Three areas of Wales saw their GDP decline in 2018. The Central Valleys recorded the biggest drop at 4.0%, followed by Powys at 1.3% and South West Wales at 0.7%. In UK terms, the lowest annual growth of subnational areas was in Mid and East Antrim at -10.1%.

GDP per head growth of 4.2% to £28,821 was seen in Monmouthshire and Newport although at £31,824 Cardiff and Glamorgan were top. GDP per head fell by 4.4% in the Central Valleys to £17,950 but despite a growth rate of 3.8% Anglesey was bottom in Wales with £17,781.

In terms of UK extremes, GDP per head in Camden and the City of London was £395,309 and £15,034 in Ards and North Down. Three areas of Wales were in the UK bottom ten; Anglesey was 176th out of 179 despite the good growth rate of 3.8%. These figures are a guide and are influenced by commuter flows.

In 2018, key drivers of the Welsh economy were mining and quarrying up 6.1%, administrative support services 5.3% and transportation and storage up 3.9%. Those areas that did not perform well were education down by 3.3%, arts/entertainment declined by 2.3% and information and communication down 0.8%. Overall the services and manufacturing sectors grew by 1.5% and construction grew by 1.1%.

The 2018 performance of the country’s three economic areas was also highlighted by the ONS. Of the UK’s 45 development bodies or economic regions (the Welsh Development Agency was abolished in 2006), Greater Birmingham and Solihull LEP was ranked 1st in the UK with growth of 2.8%. The North Wales Economic Region moved up the rankings from 35th to 7th with growth of 2.2% whilst the South East Wales Economic Region was static at 21st. The Mid and South West Wales Economic Region moved up 16 places to 27th with growth of only 0.8%.

More data from the ONS showed unemployment in Wales dropped by 4,000 to 55,000 between August and October 2019; the drop of 0.2% took the overall rate to 3.6%. 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 74.3% in Wales. The UK rate was 76.2%.

UK property prices grew in only three parts of the country. Growth of 0.7% in Wales during October 2019 took prices to £166,245, an annual uplift of 3.3%, the biggest hike in Britain. In comparison, UK prices fell by 0.7% to £232,944, an annual growth rate of 0.7%.

The Welsh economy ranked third in the UK despite contracting by 0.5% in Q1, pay in Wales is the lowest in the UK, and a big monthly drop in house prices

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On economic development, Aston Martin launched the DBX sport utility vehicle, its first Wales-made car. The firm’s first full-size five-seater will cost £158,000. The St Athan plant employs 300 workers, which could rise to 750 staff when fully operational, and has the capacity to produce 4,000 DBX vehicles a year.

The factory could also build the firm’s new electric Lagonda and RapidE cars, although these will be produced on a much smaller scale.

The Welsh Government pledged £18.8m in grants to attract the firm with taxpayers also on the hook for a 30-year guarantee to Aston Martin that would see public money cover the rent of the factory should the firm leave.

The value of the guarantee has not been disclosed. Earlier this year, Aston Martin announced it was borrowing £116.7m in high yield debt.

Also on cars, Ineos is building a manufacturing and assembly plant for its new 4×4 vehicle and plans to begin production in Bridgend in 2021. It is expected to initially create around 200 jobs to make the Grenadier, and up to 500 roles in the long-term.

It is not known how much taxpayers will stump up but the firm is planning to invest £600m in the new car, inspired by the original Land Rover Defender, which went out of production in 2016.

Tata Steel announced it expects to cut 1,000 jobs across the UK as part of its restructuring plans. Two thirds of the losses will be management and office-based roles, but jobs in Wales could be at risk.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for Wales and the nine English regions, 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 figures showed the Welsh economy grew by 2.6% compared with 1.8% in the year ended December 2018. This ranked the ‘region’ third (previously fifth) out of the twelve UK ‘regions’.

London topped the table with growth of 4.2% with Yorkshire and The Humber bottom at -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, however, also showed that the Welsh economy, along with the East Midlands and Yorkshire and the Humber, contracted in the quarter to March 2019. The contraction was 0.5% in January to March 2019, following growth of 0.4% in October to December 2018.

In this period, manufacturing grew by 1.6% and health grew by 1.0%, with wholesale and retail trade growing by 0.9%.  The transportation and storage industry output fell by 17.6% and the information and communication industry fell by 4.5%.

Overall, the production sector was the main driver of GDP within Wales with the services sector a major drag on the economy.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked Wales sixth (pervious ranking eighth) with growth of 1.31%, which suggests the country has had a better summer than winter.

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

More data from the ONS showed that unemployment decreased by 2,000 to 59,000 between July and September; the decrease of 0.1% took the overall rate to 3.8%. Northern Ireland had the lowest rate of 2.5%, with the UK rate also 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 73.9% in Wales; the UK rate was 76.0%.

In September, average earnings in Wales were down by £55 to £527 per week, the lowest in the UK. London had the highest average earnings of £830. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

Welsh average property prices fell by 2.8% (the biggest drop in the UK) over the month to £164,433 which took the annual uplift to 2.6%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

Planning permission for Wylfa Newydd nuclear power project deferred, a slew of job losses, and taxpayers on the hook for more cash at Cardiff Airport

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Unemployment in Wales increased by 5,000 to 64,000 between June and August, the increase of 0.4% took the overall rate to 4.2%.

The South West of England 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 of England.

The South West also had the highest employment rate at 81.0% which compared with 74.1% in Wales. UK employment was estimated at 75.9%.

Welsh average property prices increased by 2.3% to £168,318, which took annual growth to 4.5% which was the highest in the UK. 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 coastal communities in Great Britain earn on average £1,600 less per year than those living inland. Since 2010 wages fell by c20% in real terms in Delyn the fifth biggest faller in the UK.

In seaside towns median wages were £22,104 compared with £23,785 in non-coastal areas.

The ONS’s Personal Well-being (or Happiness) Index has ranked Wales eighth out of the 12 UK ‘regions’ in terms of improved happiness since the last survey. Overall though, the Northern Irish were still the happiest in the UK with Londoners still the most miserable.

Development

UK Business Secretary, Andrea Leadsom, has deferred the decision on whether to give the stalled Wylfa Newydd nuclear power project planning permission, citing the need for more information on environmental and other impacts.

At £15bn it is the biggest energy project ever proposed in Wales. Developers Horizon Nuclear Power said the decision would heavily influence how the project progressed.

Is the Government losing interest in the project? Given EDF Energy said the construction cost for Hinkley Point C in Somerset had climbed by between £1.9bn/£2.9bn to a total cost of £21.5bn /£22.5bn last month, and the success of the Government’s recent offshore wind auction, it is possible.

Another wrinkle is the Government’s growing fondness for a new consumer pays first funding model, known as RAB (Regulated Asset Base), which has already been used to finance some large infrastructure projects, including the £4.2bn Thames Tideway ‘super-sewer’. This might also explain the delay.

In terms of economic development, c9,000 workers were expected to be involved in building the two nuclear reactors in Anglesey. Private sector funders, Japanese energy firm Hitachi, have already put plans on hold after failing to reach a deal with the UK government over the price it would be paid for power from the site.

In Chirk, wood panel manufacturer, Kronospan, will now go ahead with the firm’s £200m three year expansion project at its site where more than 600 are employed.

Wrexham councillors put Kronospan’s plans on hold in March amid concerns about the impact on road safety but the firm launched and won an appeal to the Welsh Government.  About 100 new jobs will be created. It can sometimes be frustrating for promoters of local economic growth when expansion plans can be hindered by councillors.

The Welsh Whisky Company, which currently operates the Penderyn Distillery near Aberdare, is proposing to open a second £5m distillery and visitor centre in Llandudno by 2021. The Welsh government has offered £1.4m of public money towards the project.

The firm is also redeveloping a disused building at the Hafod Morfa Copperworks site in Swansea, with an opening date of 2022.

Jobs

Eighty-two workers were made redundant in June when cheese maker GRH Foods in Minffordd, Gwynedd, went into administration.

The company has now been acquired by continental cheese supplier Futura Foods which plans to restart operations in the coming months. The firm was not able to comment on how many staff it would hire.

Hi-Lex Cable Systems, which makes door and window parts and cables for cars at its plant in Port Talbot, has announced it will close in 2021.

The Japanese firm, which supplies Honda, Audi and BMW among others, said it did not anticipate any redundancies in the next 12 months but about 125 jobs will eventually go. Any work left at the plant in 2021 will be transferred to a Hi-Lex plant in Hungary.

Tomlinsons Dairies in Wrexham has gone into administration with the loss of 331 jobs. Administrators cited increased energy costs and a fall in the price of cream as reasons why the firm has become unviable.

A further 120 jobs are to be lost at claims management call centre We Fight Any Claim in Cwmbran, Torfaen, bringing the total jobs lost over the last two months to 250. The firm said 150 of its 400 staff would remain at the company after demand for its services fell following the passing of the PPI deadline.

Furniture company Triumph Furniture of Merthyr Tydfil, has gone into administration with 252 job losses after an unprecedented fall in sales. The company previously entered administration in 2011 before a management buyout.

Peter’s Pies based in Bedwas, Caerphilly, said it had spoken to some of the 252 Triumph staff after the firm announced the creation of 110 new jobs. The company is moving to a two-shift operation after securing a number of new deals.

Transport

A Welsh Government spokesman has said state owned Cardiff Airport adds £240m GVA to the Welsh economy and sustains around 2,400 aviation related jobs.

This was after a new tax payer loan was announced bringing the total amount of cash the airport can borrow from the Welsh Government to £59.4m. Most of the original loan of £38.2 has already been drawn down according to officials, which suggests the new £21.2m blurs the line between investment and working capital. 

Its latest accounts show the airport made a pre-tax loss of £6.6m in 2017/18. Welsh ministers paid another £52m in 2013 to buy the airport.

At c£80m of public money already deployed to keep the airport operating, and with a further £21m now at risk, the economic case looks increasingly thin.