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 EM’s growth has dropped from 0.7% to 0.1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).
This ranked the EM last (previous ranking eleventh) and suggests the region has worsened relative to the other eleven parts of the UK. Over the same period UK growth was 1.4% and growth in London (ranked first) was 3.3%.
The latest official ONS figures for an earlier period are better. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the EM, the other eight English regions, and Wales. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.
These stats are for the period six months before the ESCoE estimates shown above and compare GDP in the quarter ended June 2019 with the same quarter a year earlier. These more volatile figures showed the EM economy grew by 1.8%, down from 2% growth the previous quarter. This placed the EM second (previous ranking fifth) 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’ (including the WM) in the UK to suffer a decline.
In the same report, the ONS’s figures also highlighted that the standalone quarter to June 2019 was also better for the region than the previous quarter. The EM economy grew by 0.6% in April to June 2019, following growth of 0.1% in January to March 2019.
This placed the EM third (previous ranking ninth) out of the twelve UK ‘regions’. Six regions of the UK saw their economies contract as did the UK overall by 0.2%.
In this period, regional sectors, electricity/gas/steam/air conditioning supply and manufacturing grew by 8.0% and 1.0%. Also finance and wholesale/retail trade grew by 9.4% and 1.9% but EM’s professional scientific and technical activities fell by 3.7%.
In general all sectors in the region grew, with production, services, construction and agriculture expanding by 1.6%, 0.3%, 0.2% and 0.1% respectively. Construction has been the best performer relative to 2017 with agriculture, production and services moderately flat since Quarter 3 (July to Sept) 2018 although production saw an uplift in Quarter 2 2019.
Like most regions of the UK, output per hour in the EM was below the UK average. Productivity in the EM was 13.5% under the norm which ranked the region eighth in the UK.
Two regions had productivity above the UK average in 2018, London +31.6% and the South East +9.1%. These regions record high levels of hours worked and their high productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.
The EM moved down the rankings slightly to ninth in terms of output per job. This means that on average workers in the EM worked shorter hours for each job compared with the UK average. The region’s 14.5% below the UK average compared with London at 40.5% above.
In terms of growth in output per hour, six regions of the UK expanded. The EM was ranked second as output per hour grew by 2.1%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK growth was 0.5%.
In terms of sectors, productivity in arts/entertainment/recreation was better than expected but finance and insurance disappointed.
On average, in 2018 the UK economy produced about £35 of value for each hour worked, with finance and insurance top at c£69 per hour compared with accommodation and service activities productivity at c£17 per hour.
More data from the ONS showed unemployment in the region decreased by 21,000 to 89,000 between October and December; the big drop of 0.9% took the rate to 3.6%. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%. The highest rate was 6.1% which was recorded in the North East.
The South West had the highest employment rate at 80.1% which compared with 78.4% in the EM, where 2.5m are employed; the UK rate was 76.5%.
In December, average earnings in the EM fell by £3 to £580 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The EM was ranked eighth (previous ranking also eighth).
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.
The EM’s average property price increased by 0.5% over the month to £197,048, the uplift took the annual increase to 2.8%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.