The State of Britain

The South West’s economy grows by a UK best of 19.9%

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Official ONS figures which reflect the economy opening up after the first lockdown show the region’s performance relative to other parts of the UK.

These stats compare GDP in the quarter ended September 2020 with the same quarter a year earlier. These showed that the SW’s growth was -5.2% compared with -21.4% the previous quarter. This placed the SW third (previous ranking fifth) out of the twelve UK ‘regions’.

Northern Ireland topped the table with growth of -2.9% whilst UK growth over the same period was -7.5%. The West Midlands was bottom, posting growth of -11.3%.

In the same report, the ONS’s figures for the standalone quarter to September 2020 showed the SW post growth of 19.9% compared with -18.9% in April to June 2020.

This placed the SW first (previous ranking seventh) out of the twelve UK ‘regions’; London was bottom, posting growth of 13.3%; UK growth was 16.9%.

In this period, the SW’s best sector was accommodation at 307% compared with mining at -5.6%. Production, Construction and Services were 22%, 49% and 18%.

Labour

Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was 17,000 lower at 110,000 between January and March; the drop of 0.2% took the rate to 3.9%. At 6.8% London was the highest; the South East had the lowest rate of 3.4%, with the UK rate at 4.8%.

The South East had the highest employment rate at 78.5%, this compared with 69.1% in Northern Ireland and 76.7% in the SW where 2.7m are employed; the UK rate was 75.2%.

Public sector employment in the SW increased by 3.3% to 458,000, which was 16.8% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.5% in London which was the lowest.

In December, average earnings in the SW grew to £654 per week. London had the highest average earnings of £871 and the lowest average earnings of £584 were recorded in the North East and the East Midlands.

Earnings in Scotland increased the most in the UK by £37 per week whereas the biggest drop in wages was £50 in the East Midlands. The rate of annual pay growth was 4.0% for total pay and 4.6% for regular pay. In real terms, total pay is growing at a faster rate than inflation at 3.1%, with regular pay growth at 3.6%. Public sector pay grew at 5.6% compared with 3.7% in the private sector.

The public sector saw the highest estimated growth in total pay. All sectors saw positive growth, although construction (1.2%) and manufacturing (1.9%) had smaller growth than the other sectors. This is an improvement on the growth rates in April to June 2020, the three-month period with the biggest falls in average pay, when all sectors except for the public sector had negative growth rates.

Housing

The SW’s average property price increased by 2.6% in March 2021 to £287,650. The uplift took the annual increase to 10.9%. In comparison, UK prices grew by 1.8% to £256,405 during March, an annual growth rate of 10.2%.

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