SE growth accelerates and moves the region up the rankings, highly productive London means only the SE beats the UK average, but the region outdoes the capital on productivity growth

Reading Time: 3 minutes

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 SE’s growth has increased from 0.9% to 1.8%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the SE fourth (previous ranking tenth) and suggests the region has improved 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%.

The latest official ONS figures for an earlier period are more mixed. Following its first publication of quarterly GDP estimates for the regions in September 2019, the ONS has now published its third estimate for the SE 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 the SE grew by 1.4%, down from 2.7% growth the previous quarter. This placed the SE third (previous ranking second) 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, the ONS’s figures highlighted that the standalone quarter to June 2019 was worse for the region than the previous quarter. The SE economy contracted by 0.7% in April to June 2019, following growth of 0.2% in January to March 2019.

This placed the SE eighth (previous ranking ninth) 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, SE information/communication and finance showed growth of 4.3% and 6.6% but education and construction fell by 8.0% and 3.6%. In general all of the SE’s sectors shrank, with construction, production, agriculture and services falling by 3.6%, 1.4%, 0.7% and 0.4% respectively.

Overall the region has seen growth in the agriculture and services sectors relative to 2017 but the production sector has fallen whilst construction fell after growth in 2018 and has continued to fall into Quarter 2 2019.

Productivity

Unlike most regions of the UK, output per hour in the SE was above the UK average. Productivity in the SE was 9.1% above the norm which ranked the region second in the UK.

The SE was one of two regions that had productivity above the UK average in 2018; the other was London +31.6%. 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 SE was also second in the rankings in terms of output per job. The region’s 6.1% higher than 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 SE was ranked third as output per hour grew by 1.7%. 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%.

Sectorally, 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.

Labour

More data from the ONS showed unemployment in the region fell slightly by 1,000 to 151,000 between October and December; which left the rate unchanged at 3.1%. 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 still had the highest employment rate at 80.1% which pipped 80% or 4.7m in employment in the SE; the UK rate was 76.5%.

In December, average earnings in the SE increased by £18 to £728 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The SE was ranked second (previous ranking also second).

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.

Housing

The SE’s average property price fell by 0.3% over the month to £325,050; the drop took the annual increase to 1.2%. In comparison, UK prices increased by 0.3% to £234,742 during September, an annual growth rate of 2.2%.

Leave a Comment

Your e-mail address will not be published. Required fields are marked *