Regional inequality flagged by Solihull and Sandwell, weak growth in Telford and pandemic related job losses mount up

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Administrations and job losses in the region are on the increase as the effects of the pandemic on businesses solidify.

Lee Longlands, a historic Midlands furniture company which was established in 1902 has gone into administration. Its shops in Birmingham, Leamington Spa, Kidderminster, Abingdon, Derby and Cheltenham were closed for three months and have only just re-opened as lockdown restrictions eased.

Up to 80 jobs could be cut at pie manufacturer Wrights. The Crewe based firm started making pies in 1926 but now supplies savoury goods and other products to businesses such as restaurants and bakers. Many of its clients in airline catering and hospitality have either closed or are working at reduced capacity due to the impact of coronavirus. Wrights hopes to avoid compulsory redundancies and has started a 30-day consultation.

Coventry-based car-maker Jaguar Land Rover is set to cut the number of contract-agency workers its employs, following a sales drop. The car-maker has plants across the UK, including Castle Bromwich, Solihull, and Halewood; up to 1,100 temporary roles are at risk.

The Stats

This month the ONS published regional household disposal income figures for 2018. Total gross disposable household income (GDHI) in the UK in 2018 was £1.4bn. Of that, 86.3% was in England, 7.6% was in Scotland, 3.8% was in Wales and 2.3% was in Northern Ireland.

The average UK income per head after direct and indirect taxes were taken off was £21,109.  England was the only country above the UK average at £21,609 but growth in incomes was best in Scotland and Northern Ireland at 5.1% and 4.7%. England’s growth was the same as the UK at 4.6%; Wales grew by 4.4%.

Regionally London had the highest GDHI per head where, on average, each person had £29,362 available to spend or save; the North East had the lowest at £16,995 which compares with a UK average of £21,109. The WM was £18,222.

At a local level, Kensington and Chelsea and Hammersmith and Fulham district had the highest GDHI per head at £63,286 with Nottingham the lowest at £13,138. All the top 10 local areas were in London or the South East with the bottom 10 within the North West, Yorkshire and The Humber, East Midlands, West Midlands, and Northern Ireland regions.

The wealthiest part of the WM was Solihull with incomes of £24,146. This ranked the area 29th out of 179 districts of the UK.

The poorest area of the region was Sandwell at £14,407, beating Birmingham at £15,281. Sandwell was ranked 175th in the UK, Nottingham and Leicester were bottom.

In terms of regional growth, the largest increase was in London at 5.2% with the smallest in the East Midlands at 3.6%. WM growth was 4.7%.

At the local level, Kensington & Chelsea and Hammersmith & Fulham was best again in the UK with growth of 7.6% whereas Luton was the worst and only grew by 0.9%.

In the WM, income growth in Solihull was top at 6.1% with Stoke second at 5.9%. Telford was the worst regional performer with growth of 2.0%, a ranking of 174th.

Labour

More data from the ONS showed unemployment in the region was 7,000 higher at 141,000 between February and April; the uplift of 0.3% took the rate to 4.8%. This narrowed the gap with the North East at 5.2% which was still the highest; Northern Ireland had the lowest rate of 2.3%, with the UK rate at 3.9%.

The South East had the highest employment rate at 79.5% which compared with 74.5% in the WM where 2.8m are employed; the UK rate was 76.4%.

Public sector employment in the WM increased by 1.5% in March to 444.000, which was 16.2% of the workforce. At 25.2% Northern Ireland had the highest level of public sector employment which compared to 13.9% in London which was the lowest.

In March, average earnings in the WM fell by £9 to £586 per week. London had the highest average earnings of £847 and the lowest average earnings of £537 were recorded in Northern Ireland.

Earnings in the NE increased the most in the UK by £60 per week whereas the biggest drop in wages was £37 in Scotland.

In the UK overall, average earnings grew by 1.7% or by 0.4% after inflation. If bonuses are included real pay fell by 0.4%.

The public sector saw the highest estimated growth, at 3.2% for regular pay, while negative growth was seen in the construction sector, estimated at negative 1.8%. Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay.

Housing

Estimates of private sector rents for the year to March 2020 were published by the ONS this month.

The median monthly rent was an all time high of £700 in England between 1 April 2019 and 31 March 2020. London had the highest median monthly rent at £1,425 with the North East the lowest at £495. Within local authorities the difference in monthly rental price between the most and least expensive was nearly £2,100.

In the WM rental prices ranged from £525 to £750 with £645 the median.

Data for the 12 months to May 2020 showed private rental prices paid by tenants in the UK rose by 1.5%, unchanged from the previous month. Rental prices grew by 1.5% in England, 1.2% in Wales and 0.6% in Scotland.

Rental prices increased the most in the South West, up by 2.5%, with the lowest price growth in the North East at 0.8%, the WM recorded 2.2%.

According to the ONS the South West is also projected to have the highest regional rate of growth in households over the next ten years, at 9%. This compares with 7.7% in the WM and 4.3% in the NE (the lowest).

Overall the number of households in England is projected to increase by 1.6m (7.1%) from 23.2m in 2018 to 24.8m in 2028. The WM is forecast to have 2.6m households by 2028.

Given the closure of the housing market following lockdown the ONS has suspended its property price index until further notice.

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