A nowcast for Y&H 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 Y&H economy contracted by 11%.
This ranked Y&H fifth in the UK (previous ranking eighth). 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 Y&H post growth of 0.4% compared with 19.2% in July to September 2020.
This placed Y&H ninth (previous ranking fourth) 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, Y&H’s best sector was information at 3.8% whilst accommodation fell by 12.8. Production, Construction and Services were 1.8%, 5.4 and -0.5%.
Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was 5,000 lower at 135,000 between March and May 2021; the drop of 0.2% took the rate to 5.0%. 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 72.9% in Y&H where 2.5m are employed; the UK rate was 74.7%.
Public sector employment in Y&H increased by 3% to 483,000 in the year to March 2021, which was 19% 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.
ONS figures also showed that in 2020, output per hour worked fell by 0.9% in Y&H which ranked the region 11th 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 £1.8bn of R&D spend in 2019, up from £1.7bn in 2018. This ranked Y&H ninth in the UK (previously ranking also ninth). 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.
Y&H’s average property price increased by 0.8% in May to £181,856. The uplift took the annual increase to 10.2%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.