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 the capital’s growth has increased from 2.3% to 3.3%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).
This ranked London first (previous ranking also first) and suggests the capital has retained its top position relative to the other eleven parts of the UK. Over the same period UK growth was 1.4% and growth in the East Midlands (ranked twelfth) was 0.1%.
The latest official ONS figures for an earlier period are similar. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for London 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 London grew by 4.5%, up from 4.2% growth the previous quarter. This maintained the capital’s first place out of the twelve UK ‘regions.’
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, the ONS’s figures highlighted that the standalone quarter to June 2019 was poorer for the capital than the previous quarter. London’s economy grew by 1% in April to June 2019, following growth of 1.6% in January to March 2019.
In this period, the star performers in London were the wholesale/retail trade and finance industries which grew by 5.2% and 4.7% but the transportation/storage industry fell by 3.5%.
Overall the services, agriculture and production sectors grew by 1.1%, 0.6% and 0.3% respectively but the construction sector fell by 1.7%. London has experienced strong growth in the production sector relative to 2017 while construction has continued to fall since Quarter 3 (July to Sept) 2017.
Unlike most regions of the UK, output per hour in London was above the UK average. Productivity in the capital was 31.6% above the norm which was the best in the UK.
London was one of two regions that had productivity above the UK average in 2018; the other was the SE at +9.1%. These regions record high levels of hours worked and their elevated productivity pulls up the UK average so much that all other regions fall below it. Wales was furthest off the average at -17.2%.
London was also first in the rankings in terms of output per job. The capital’s 40.5% compared with Wales at -18.2%.
In terms of growth in output per hour, six regions of the UK expanded. London was ranked sixth as output per hour grew by 0.5%. At 2.3% growth was fastest in Scotland and the biggest contraction was in Yorkshire and the Humber at 2.5%. UK average growth was 0.5%.
Sectorally, productivity in non-manufacturing production and agriculture was better than expected but manufacturing 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 capital fell by 10,000 to 213,000 between October and December; the drop of 0.3% took the overall rate to 4.3%. 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 75.5% or 4.8m in employment in the capital; the UK rate was 76.5%.
In December, average earnings in London fell by £25 to £805 per week the highest in the UK; the lowest average earnings of £530 were recorded in the NE.
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.
London’s average property price increased by 1.6% over the month to £483,922; the uplift took the annual increase to 2.3%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.