Every year just before Christmas, the Office for National Statistics releases its latest data for regional gross value added (GVA).
This is an estimate of the economic performance of different parts of the UK by measuring the increase in the value of the economy due to the production of goods and services.
For politicians and policymakers, it has become the standard by which the Welsh economy is compared to the rest of the UK and, given that Wales has had the lowest GVA/head for two decades, has been a constant source of disappointment for those wishing to see the Welsh economy grow.
Unfortunately, yesterday’s release of the statistics on regional GVA for 2017 show that nothing much has changed since last year.
London remains the most prosperous part of the UK with a GVA/head of £48,857 whilst Wales is the poorest with £19,899. This is despite the fact that the Welsh economy is now, overall, worth £62 billion.
Whilst Wales was the fastest growing part of the UK in 2016, there has been a considerable slowdown in the following year. Between 2016 and 2017, the UK economy has grown in real terms by 1.9 per cent although Wales has only expanded by 1.4 per cent. Only Yorkshire and the Humberside, and the South West of England having lower growth rates across the UK.
If we examine this data at a city region level, then it suggests that the funding being made available through City Deals for both Cardiff and Swansea could not have come at a better time.
Regarding the capital cities of the UK, it is not surprising that, as one of the major business and financial centres of the World, the Greater London Authority area saw an annual growth of 2.9 per cent, although this was lower than that experienced in Edinburgh with Scotland’s capital city growing by 3.3 per cent.
In contrast, the Cardiff Capital region grew by 1.8 per cent with a considerable slowdown in activity during the last three years. Certainly, with some ambitious projects such as the Compound Semiconductor cluster coming on line soon, it will look to close this gap over the next few years.
Given the recent troubles over the Swansea Bay Deal, particularly its flagship Wellness Village project in Llanelli, many within the region will be disappointed that it has not grown at all in real terms between 2016 and 2017. If nothing else, this demonstrates that the independent review of this programme ordered recently by the UK and Welsh Governments must ensure that increasing economic activity is at the heart of any recommendations for its future delivery.
With both North and Mid Wales having secured support for their own growth deals in last month’s budget, it is worth noting their contrasting fortunes with the North Wales Growth Deal area growing by 2.9 per cent between 2016 and 2017, whilst Mid Wales Growth Area economy has actually decline by 2.9 per cent over the same period.
Therefore, it is disappointing economic news for Wales overall and there will be hopes that the uncertainty over Brexit will not have slowed down the Welsh economy further during the last twelve months as it looks to close the prosperity gap with the rest of the UK.