The State of Britain

WALES

The second lockdown hits the Welsh economy the hardest but unemployment remain low

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A nowcast for Wales 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 country’s economy contracted by 13.4%.

This ranked Wales bottom in the UK (previous ranking eleventh). 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 country’s performance relative to other parts of the UK.

The ONS’s figures for the quarter to December 2020 showed Wales post growth of 0.9% compared with 14.4% to September 2020.

This placed Wales sixth (previous ranking eleventh) 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, Wales’s best sector was administration services at 8.5% whilst accommodation fell by 19%. Overall Production, Construction and Services were -0.6%, -0.1% and 1.3%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in Wales fell by 16,000 to 59,000 between March and May 2021; the drop of 1% took the rate to 3.9%. 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 73.6% in Wales where 1.5m are employed; the UK rate was 74.7%.

Public sector employment in Wales increased by 4.6% to 311,000 in the year to March 2021, which was 22.2% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.8% in London which had the lowest.

Productivity

ONS figures also showed that in 2020, output per hour worked increased by 0.3% in Wales which ranked the country seventh 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

Wales attracted £0.8bn of R&D spend in 2019, the same as 2018. This ranked Wales eleventh in the UK (previous ranking tenth). 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

Wales’s average property price increased by 0.8% in May to £184,297. The uplift took the annual increase to 13.3%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.

The Welsh economy lags other parts of the UK out of the first Lockdown

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Official ONS figures which reflect the economy opening up after the first lockdown show the Wales’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 Wales’s growth was -6% compared with -18.3% the previous quarter. This placed Wales fourth (previous ranking third) 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 Wales post growth of 14.4% compared with -15.2% in April to June 2020.

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

In this period, Wales’s best sector was accommodation at 303% compared with agriculture at -1%. Production, Construction and Services were 15%, 31% and 13%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was up 1,000 at 68,000 between January and March; this took the rate to 4.4%. 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 74% in Wales where 1.6m are employed; the UK rate was 75.2%.

Public sector employment in Wales increased by 3.5% to 306,000, which was 21.9% 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 Wales dropped to £606 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 Welsh average property price increased by 3.1% in March 2021 to £185,341. The uplift took the annual increase to 11%. In comparison, UK prices grew by 1.8% to £256,405 during March, an annual growth rate of 10.2%.

An 18% pandemic induced economic contraction but wages increase the most in the UK

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A nowcast for Wales for the 12 months ended December 2020, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the country’s economy contracted by 12.5%. This ranked Wales eleventh 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 with Wales ranked eleventh.

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 country’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 Wales’s growth was -18.3% compared with -3.8% the previous quarter. This placed Wales third (previous ranking seventh) 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 Wales post growth of -15.1% compared with -2.4% in January to March 2020.

This placed Wales second (previous ranking fourth) 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%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the country was 2,000 lower at 68,000 between October and December; the drop of 0.2% took the rate to 4.4%. 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 72.2% in Wales where 1.4m are employed; the UK rate was 75%.

Public sector employment in Wales increased by 2.9% to 302,000, which was 21.8% 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 Wales increased to £624 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

Wales’s average property price increased by 2.3% in December 2020 to £184,195. The drop took the annual increase to 10.7%. In comparison, UK prices grew by 1.2% to £251,500 during September, an annual growth rate of 8.5%.

The Welsh economy falls by 12% and unemployment jumps by 1.9%

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A nowcast for Wales 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 Wales economy contracted by 11.4%.

This ranked the Wales last in the UK and suggests the country’s economy has so far coped ‘poorly’ 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%; the UK decline according to these figures was c8%.

However, the total percentage change in the Welsh GDP relative to the end of 2019 is about -12%. 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 country’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 Wales’s growth was -3.8% compared with -0.5% the previous quarter. This placed Wales seventh (previous ranking eighth) 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 Wales posted growth of -2.4% compared with -1% in October to December 2019.

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

In this period, Wales’s best sector was water with growth of 3.3% but education fell by 17.8%. Production, Construction and Services were +0.4%, +0.1% and -3.5%.

Labour

Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the country was up by 28,000 at 70,000 between July and September; the uplift of 1.9% took the rate to 4.6%. 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 72.1% in Wales where 1.4m are employed; the UK rate was 75.3%.

Housing

The Welsh average property price fell by 1.9% in September 2020 to £170,604.  The drop took the annual increase to 3.8%. In comparison, UK prices grew by 1.7% to £244,513 during September, an annual growth rate of 4.7%.

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%.