New figures illustrate depth of economic decline in West Midlands

NEW figures released by the Office for National Statistics have illustrated how severely the West Midlands has been effected by economic decline – not just during the recession but for a 15-year period spanning 1997 to 2012.

The ONS report, GVA for Local Enterprise Partnerships 1997-2012, details for the first time economic output (as measured by nominal gross value added) for each LEP area. However, given that the LEPs were only established in 2011 their impact on the figures is negligible to say the least.
 
This is a fact acknowledged by the ONS, which states in the report “obviously the LEPs have not been existence over the majority of this period to influence the economic development of the areas. However, the data are useful in providing a good summary of the historical trends for each of the newly-formed LEP areas and in doing so to show which LEPs cover areas that have been performing well over this period”.

Of the LEPs displaying the highest average growth rate per annum of nominal GVA between 1997 and 2012, the only one of the six West Midland LEPS to feature in the top 10 performers is Worcestershire (4.4%), which is fourth after London (5.1%), Enterprise M3 (Hampshire & Surrey) (4.6%) and Oxfordshire (4.5%).

The list of the 10 poorest performing areas over the 15-year period shows the Black Country last with a growth rate of 2.5%. Stoke-on-Trent and Staffordshire is third from last with 3.2%, while Coventry & Warwickshire (3.2%) and The Marches (3.5%) are also in the list.

During the worst of the economic downturn – the five-year span between 2007 and 2012 – the only LEP areas to have seen annual growth of over 2% are Oxfordshire, London, Buckinghamshire Thames Valley and Enterprise M3.

Those with the lowest annual growth rate include the Black Country (0.5%) and Stoke-on-Trent and Staffordshire (0.4%). The worst performing area is Humber, which is the only LEP to see its economy shrink (-0.1%).

The ONS said GVA per head was a useful way of comparing regions of different sizes as it allowed examination of growth in economic output over time relative to changes in the size of the population.

The LEPs with the highest rate of GVA per head of population in 2012 were London, Thames Valley Berkshire and Enterprise M3.

Not a single West Midland LEP is included in the top 10 performers.

However, the Black Country, Stoke-on-Trent and Staffordshire, and The Marches all feature in those areas with the lowest rate per head.

The LEP areas with the highest average growth per head for the 2007 to 2012 period is slightly different and Worcestershire is the third best performer with a rate of 4% – the same as Enterprise M3 and Liverpool City. Over the period 1997 to 2012 the report shows the LEP areas with the highest GVA increases were London, Enterprise M3 and Oxfordshire.

The lowest percentage increases were in the Black Country, Humber and Stoke-on-Trent and Staffordshire.

Coinciding with the report was the publication of the Third Annual Review of the economic performance and characteristics of the 39 LEP areas.

Worcestershire again fared well; ranked top of the league for the product to market strategies developed by the county’s businesses.

The ranking is based on the extent to which businesses compete more on product and service quality, sophistication and market leadership rather than price.  

Worcestershire was also identified as one of the top five LEP areas in terms of highest improvement in numbers of people employed in Level 4 (highly skilled) occupations and for the highest improvement in numbers of people in Level 1 (low skilled occupations).   

The county also ranks in the top ten both for the number of employees working in high and medium technology manufacturing industries and for the number employed in manufacturing per se.    

Finally, the county also fares well in terms of levels of unemployment with the sixth lowest rate of unemployment in the whole of England.

It performed worse than others in terms of exports and inward investment.  There are also significant concerns about the potential for the workforce to grow in the future as current population projections show a decline in the potential working age population to 2021.

Peter Pawsey, executive chair of the Worcestershire LEP, said: “We were heartened to read many of the statistics contained in this latest report.

“Of concern is the potential for a decline in our working population and we must increase inward and indigenous business investment as well as accelerating the provision of housing, infrastructure and amenities across the whole county in order to retain and attract more workers to avoid our economy stagnating.”

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