The State of Britain

The NE economy falls by 16% following lockdown and unemployment hits 6.7%

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A nowcast for the NE for the 12 months ended September 2020 on a rolling 4 quarter basis, published by the Economic Statistic Centre of Excellence (‘ESCoE’), has estimated that the NE economy contracted by 6.5%.

This ranked the NE first in the UK and suggests the regional economy has so far coped ‘better’ with the pandemic relative to the other eleven UK ‘regions’ on this metric. Wales’s 11.4% contraction was the ‘worst’; the UK decline according to these figures was c8%.

However, the total percentage change in the NE’s GDP relative to the end of 2019 is about -16%. This compares with -8% across the UK.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, there is no historical data that their model can use to fully understand how the pandemic will impact regional economies. Consequently the partnership emphasises the uncertainties that exist with their nowcast at this time.

ONS GDP to March 2020

Official ONS figures for an earlier period which reflects the start of the Covid 19 turmoil show the region’s performance relative to other parts of the UK.

These stats are for the period six months before ESCoE’s estimates shown above and compare GDP in the quarter ended March 2020 with the same quarter a year earlier. These showed that NE growth was -3.9% compared with -0.7% the previous quarter. This placed the NE eighth (previous ranking tenth) out of the twelve UK ‘regions’.

London topped the table with growth of 1.5% whilst UK growth over the same period was -2.2%. The West Midlands was the worst performer and grew by -5.3%. London was the only region to show positive growth.

In the same report, the ONS’s figures for the standalone quarter to March 2020 showed the NE post growth of -2.7% compared with -1.3% in October to December 2019.

This placed the NE sixth (previous ranking twelfth) out of the twelve UK ‘regions. No region showed positive growth. London was top with quarterly growth of -1.5% whilst Northern Ireland was bottom, posting growth of -4.5%.

In this period, the NE’s best sector was water supply with growth of 3.7% but arts fell by 11.4%. Production, Construction and Services fell by 3.4%, 1.1% and 2.7%.


Data from the ONS showed the Job Retention Scheme continued to depress unemployment across the UK. Unemployment in the region was 15,000 higher at 88,000 between July and September; the uplift of 1.2% took the rate to 6.7%. At 6.7% the North East was the highest; Northern Ireland had the lowest rate of 3.6%, with the UK rate at 4.8%.

The South East had the highest employment rate at 78.3%, this compared with 70.5% in Northern Ireland and 71.5% in the NE where 1.2m are employed; the UK rate was 75.3%.


The NE’s average property price increased by 2.8% in September 2020 to £136,262. The uplift took the annual increase to 3.3%. In comparison, UK prices grew by 1.7% to £244,513 during September, an annual growth rate of 4.7%.