The State of Britain

Unemployment unchanged but the NE one of five UK regions to suffer a decrease in productivity

Reading Time: 3 minutes

A nowcast for the NE for the 12 months ended March 2021 which incorporates the second lockdown, published by the Economic Statistic Centre of Excellence (‘ESCoE’) on a rolling 4 quarter basis, has estimated that the NE economy contracted by 12.6%.

This ranked the NE eighth in the UK (previous ranking sixth). Over the same period the East Midlands was ‘best’ with a fall of 9.4%, with Wales’s 13.4% contraction the ‘worst’. The UK overall posted -11.8% on the same measure.

ESCoE is a partnership of research institutions and the Office for National Statistics (‘ONS’) and has highlighted that during these unprecedented times, with differing lockdowns, 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. This is the last nowcast that will be published by ESCoE with the ONS taking over the running of the model in the future.

ONS GDP to December 2020

Official ONS figures for an earlier period which reflect a mix of continued recovery from the first lockdown but also a slowdown from the second lockdown show the region’s performance relative to other parts of the UK.

The ONS’s figures for the quarter to December 2020 showed the NE post growth of 1.6% compared with 15.7% to September 2020.

This placed the NE third (previous ranking ninth) out of the twelve UK ‘regions’. London was top with quarterly growth of 3.1% whilst the East Midlands was bottom, posting growth of -0.8%. UK growth was 1%.

In this period, the NE’s best sector was transport at 9.3% whilst accommodation fell by 21.2. Production, Construction and Services were 5.4%, 1.8% and 0.6%.


Data from the ONS showed the Job Retention Scheme continued to mitigate unemployment across the UK. Unemployment in the region was unchanged at 75,000 between March and May 2021; which left the rate at 5.8%. At 6.5% London 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 77.7%, this compared with 70.3% in Northern Ireland and 72% in the NE where 1.2m are employed; the UK rate was 74.7%.

Public sector employment in the NE increased by 3% to 243,000 in the year to March 2021, which was 21% of the workforce. At 25.9% Northern Ireland had the highest level of public sector employment which compared to 14.8% in London which was the lowest.


ONS figures also showed that in 2020, output per hour worked fell by 0.6% in the NE which ranked the region ninth out of the 12 UK ‘regions’. Productivity growth in 2019 was best in the North West, increasing by 4.6%, and fell the most in the West Midlands, decreasing by 1.4%. Output per hour worked in the UK increased by 0.4%.

Research and Development

The region attracted £0.7bn of R&D spend in 2019, similar to 2018. This ranked the NE twelfth in the UK (previously ranking eleventh). Over the same period the South East did best and secured £7.5bn of R&D expenditure.

Overall UK R&D spend rose by £1.3bn (3.4%) to £38.5bn in 2019 – the lowest percentage growth since 2013. Most R&D expenditure was in the business sector at £25.9bn (67% of the UK total), followed by the higher education sector at £9.1bn (24%).

Total R&D expenditure represented 1.74% of GDP in 2019; compared with 1.59% in 2008 and 1.72% in 2018. Overseas funding increased by 4.1% to £5.6bn in 2019 compared with 2018; this was 0.8% higher than the peak in 2014 of £5.5bn.


The NE’s average property price increased by 1.4% in May to £143,129. The uplift took the annual increase to 11.8%. In comparison, UK prices grew by 0.9% to £254,624, an annual growth rate of 10%.

Leave a Comment

Your email address will not be published.