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 NE growth has dropped slightly from 1.2% to 1.1%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).
This ranked the NE seventh (previous ranking eighth) and suggests the region has marginally improved its position 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%.
Official ONS figures for an earlier period are not so good. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the North East, 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 ESCoE’s 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 NE grew by 0.3%, down from 1.5% the previous quarter. This placed the NE ninth (previous ranking seventh) 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, there was no surprise that the ONS’s figures also highlighted that the standalone quarter to June 2019 was worse for the NE than the previous quarter. The North East economy declined by 0.8% in April to June 2019, following growth of 0.7% in January to March 2019.
This placed the NE tenth (previous ranking fourth) 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, the manufacturing industry experienced growth of 6.7% and made the largest positive contribution whereas the arts/entertainment/recreation and human health/social work activities industries fell by 56.0% and 7.4% respectively and made the largest negative contributions to growth.
Overall production grew by 5.4% whereas the services sector fell by 2.9%. Over the last two years there has been moderate growth in the production sector, the services sector had been steadily increasing (despite falling this quarter) and construction continues to show growth after a recovery in 2018.
Like most regions of the UK, output per hour in the NE was below the UK average. Productivity in the NE was 13.5% below average 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 NE slipped further down the rankings to tenth in terms of output per job. This means that on average workers in the NE worked shorter hours for each job compared with the UK average. The region’s 15.8% 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 NE was ranked ninth as output per hour contracted by 0.8%. 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 non-manufacturing production and agriculture 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 was 3,000 higher at 72,000 between October and December; the uplift of 0.3% took the rate to 6.1%, a UK outlier, at 4.5% Yorkshire & The Humber was next highest. Northern Ireland had the lowest rate of 2.4%, with the UK rate at 3.8%.
The South West had the highest employment rate at 80.1% which compared with 71.1% in the NE where 1.2m are employed; the UK rate was 76.5%.
In December, average earnings in the NE dropped by £22 to £530 per week, the lowest in the UK (previous ranking ninth). London had the highest average earnings of £805.
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 NE’s average property price increased by 0.5% over the month to £130,977 the uplift took the annual increase to 1.8%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.