Take your pick, depending on the period the NW economy ranked third or last in terms of growth, the region’s productivity ranked fifth in the UK despite no 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 NW growth has increased from 1.7% to 2%. ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’).

This ranked the NW third (previous ranking also third) and suggests the region has maintained 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 West, 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 figures 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 NW contracted by 0.7%, down from +1.8% the previous quarter. This placed the NW last (previous ranking sixth) 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 one of three 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 region than the previous quarter. The North West economy declined by 1.6% in April to June 2019, following growth of 0.8% in January to March 2019.

This placed the NW joint last (previous ranking third) 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 region’s finance industry grew by 4.0% and was the largest positive contributor to growth whereas water supply; sewerage, waste management and remediation activities fell by 27.6%. In the main, the production sector was the main drag on growth with manufacturing falling by 7.3%.

Overall, the services sector grew by 0.4% but this was weighed down by the production, construction and agriculture sectors which fell by 8.3%, 5.4% and 2.0% respectively. Over the last two years the construction sector has had strong growth.

Productivity

Like most regions of the UK, output per hour in the NW was below the UK average. Productivity in the NW was 8.4% below the average which ranked the region fifth in the UK according to the ONS.

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 NW was also ranked fifth in terms of output per job. 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 NW was ranked seventh as output per hour contracted by 0.4%. 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 arts, entertainment and recreation 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 increased by 4,000 to 157,000 between October and December; the slight uplift took the rate to 4.2%. 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 75.9% in the NW where 3.5m are employed; the UK rate was 76.5%.

In December, average earnings in the NW were unchanged at £595 per week. London had the highest average earnings of £805 and the lowest average earnings of £530 were recorded in the NE. The NW was ranked sixth.

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 NW’s average property price decreased by 0.6% over the month to £166,003, the drop took the annual increase to 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 *