Matt T

How productive are the UK regions?

There's an interesting article by Julian Gough, Principal Lecturer in Economics, Teeside Business School, in "The Business Economist", the journal of the Society of Business Economists.

He looks at the outper per head (and therefore the total output of the UK regions). According to the ONS it looks like this (if the UK average is 100)

1. London - 130.9
2. S. East - 120.5
3. East Anglia - 110.0
4. Scotland - 94.6
5. E.Midlands - 91.8
6. South West - 91.4
7. North West - 90.1
8. West Midlands - 90.1
9. Yorkshire & Humber - 86.4
10. N. Ireland - 79.2
11. Wales - 78.8
12. N.East - 77.0

This is familar but still contains some interesting observations. London is not far off double the N.East, which is more productive than Wales or N.Ireland. Scotland is relatively productive. Over time East Anglia has clearly become richer, the West Midlands poorer (I think in the early 1990s they were similarly around 100).

However just as when comparing output across countries it is usually best to correct for differing price levels, so you should across regions of the UK. Anyone who lives in London and the South-East know they are generally more expensive than (say) Yorkshire.

Adjusting for prices therefore is what Dr Gough has done. He finds that prices overall are 14.7% higher than the UK average in London and 9.2% below in the North-East. This is not an exact science, as regional price indices for all aspect of UK gdp do not exist, but his methodology seems reasonable.

Thus again with the UK average at 100, the ranking in output per head is as follows:

1. London - 114.1
2. S.East - 113.7
3. East of England - 108.5
4. Scotland - 98.6
5. East Midlands - 94.6
6. N.West - 92.8
7. West Midlands - 92.3
8. South West - 92.2
9. Yorkshire & Humber - 91.3
10. Wales - 85.0
11. North East - 84.8
12. N.Ireland - 84.4

In fact the ranking doesn't change much. However the spread is much narrow (26.7 points from 53.9). The South-West remains very adrift from the top three, suggesting the North-South divide is (as Dr Gough says) more of an arc around London from the Wash to Bristol, then curving down to Hampshire.

posted by Matthew @ 9/12/2004 05:51:00 PM Comments: 0