The State of Britain

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%.


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%.


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.