The State of Britain

ESCoe regional growth figures suggest the SW sits bottom of the UK rankings, SW unemployment remains very low but the region loses its crown to Northern Ireland

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The pooling of cross-border skills and expertise on both sides of the Severn estuary could drive prosperity for the region. That was the view of Welsh Secretary, Alun Cairns, and Secretary of State for Communities, Robert Jenrick, at the launch of the Western Gateway, a strategic partnership promoting economic growth across south Wales and the west of England.

Linking a number of towns and cities across a wide region either side of the Severn, the Western Gateway will mirror the Northern Powerhouse and Midlands Engine.

On infrastructure investment, the SW did well this month.  Of the £374m Housing Infrastructure Fund spend announced by Jenrick, £204m was in the region. The funds will be invested in roads, schools, public transport and utilities.

In Wiltshire, there was £19m for the Southern Connector Road to link the Swindon New Eastern Villages development, and there was also £75m for the Chippenham Urban Expansion. In Cornwall, the Hayle Junctions Infrastructure Project will get £13m, and in North Somerset, the M5-A38 Strategic Development obtained £97m.

On jobs, Numatic International, the firm behind the Henry and Hattie vacuum cleaners, is to expand its Chard site by about a third to 34 acres.

The investment in buildings will create space for offices, storage, and research and development. About 300 new jobs could be added to the existing c1100 headcount.

Grocer Ocado, has announced plans for a new Customer Fulfilment Centre in Bristol, creating c815 jobs. The new centre is being built in an existing warehouse and is expected to be operational by early 2021 at the latest.

In Poole, Walstead Southernprint has begun a 45-day consultation with its 179 staff. The printing plant is slated for closure due to falling magazine volumes.

The firm said printing volumes had declined by c50% between 2011 and 2018, and that the Poole work could be absorbed by its other plants in Bicester, Peterborough and St Austell.

And in Cornwall, the oldest Cornish pasty maker in the world, Warrens, has said its St Just bakery is no longer viable. The firm will keep its south-east Cornwall factory in Callington but the St Just facility is too remote and will close with significant job losses likely.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for the SW, the other eight English regions, and Wales, 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 available figures showed the SW’s economy grew by 1.0%, up from a contraction of 1.1% the previous quarter. This placed the SW tenth (previous ranking last) out of the twelve UK ‘regions.’

London topped the table with growth of 4.2%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also showed that growth in the region’s economy accelerated in the quarter to March 2019. The SW economy grew by 0.7% in January to March 2019, following growth of 0.3% in October to December 2018.

Manufacturing grew by 2.0%, the water supply, sewerage and waste management industry grew by 10.1% and the public administration and defence industries grew by 2.2%, whereas the information and communication industry, along with education, both fell by 1.7%.

Overall, the agriculture sector was the only sector to be a negative contributor to GDP growth – output in the production, construction and services sectors all grew.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the SW last (previous ranking third) with growth of 0.4%, which suggests the region has had a poor quarter relative to other parts of the UK. Using this metric, UK growth was 1.45%. Growth in London (ranked first) was 2.32%.

More data from the ONS showed unemployment in the region fell by 4,000 to 75,000 between July and September; the drop of 0.1% took the overall rate to 2.6%. For the first time in months though the region did not have the lowest rate, Northern Ireland recorded 2.5%, with the UK rate at 3.8%. The highest rate was 5.9% which was recorded in the North East.

The South West did have the highest employment rate at 81.0% which compared with the UK rate at 76.0%.

In September, average earnings in the SW were down by £8 to £595 per week. London had the highest average earnings of £830. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

The SW’s average property price was flat over the month at £260,158, which took annual growth to 0.5%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.