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NWDA RESEARCH TEAM February 2006

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Title: NWDA RESEARCH TEAM February 2006

1
NWDA RESEARCH TEAMFebruary 2006

REGIONAL ACCOUNTS FOR THE NORTHWEST
NUTS 1, 2 3 Areas

2
NWDA RESEARCH TEAM

THE NORTHWEST ECONOMY
1. Regional Accounts (NUTS 1) December 2005

3
The Northwest Economy Key Points

In 2004 the Northwests GVA was 102 billion,
10.1 of the UKs total GVA, and the 3rd largest
regional economy
GVA per head stood at 14,940 or 89 of the UK
average in 2004
The performance of the Northwest economy has been
steadily improving since 2000. In the 12 months
to 2004 the Northwest grew by 5, and faster than
both the UK (4.6) England average (4.5)
In 2003, renting, real estate business
activities was the largest contributor to
Northwest GVA, accounting for 20.7.
Manufacturing was the second largest sector
contributor accounting for 18.6
The Northwest remains the lead manufacturing
region, followed by the South East and West
Midlands

4
GVA The Northwest Economy 2004

In 2004 the Northwests headline GVA was 102bn,
10 of the UKs total
On a residence basis the Northwest is the 3rd
largest of the 12 UK regions after London the
South East, although it is only 2/3 of the size
of the South East
The Northwests share of the UKs GVA has
remained stable at around 10 since 1998
London and the South East continue to dominate
the UK economy with regional GVA of around 160bn
each

5
GVA Per Head The UK Regions

The performance of the Northwest has been
steadily improving since 2000 with GVA per head
growth averaging 4.9 p.a.
In absolute terms GVA per head has risen from
12,336 to 14,940 although both figures are 89
of the UK average
2004 saw a 1 improvement in GVA per head rising
from 88 of the UK average in 2003
In terms of GVA per head the Northwest is
currently ranked 8th out of the 12 UK regions and
7th out of the 9 English regions

6
GVA Regional Growth Rates 1998-2004

Between 1998 and 2004 Northwest GVA grew by
31.6, just behind the UK growth rate of 33.9
and the England rate of 34.4
This made the Northwest the 9th fastest growing
region over this period
Over the period the East of England London were
the fastest growing regions with growth just
below 37
Scotland was the slowest growing region with
growth of 29.8

7
GVA Regional Growth Rates2003-2004

In the 12 months to 2004 the performance of the
Northwest improved and the regional economy grew
by 5
This was faster than both the UK (4.6) and the
England average (4.5)
As a result the Northwest moved up the rankings
to joint 5th place with Wales Northern Ireland
Over the period the East Midlands was the fastest
growing region at 5.3 and London the slowest at
3.5

8
Northwest Leading Sectors 2003

In 2003, renting, real estate business
activities was the largest contributor to
Northwest GVA accounting for 20.7 (20.8bn)
Manufacturing was the 2nd largest sector with
18.6 (18.6bn)
Private services contributed just half of
Northwest GVA whilst public services accounted
for 18.5
The early 90s saw a marked shift from
manufacturing towards services. This trend is
still evident between 1998-2003 as
manufacturings share of GVA fell by 5.8pp whilst
private services rose by 3.7pp public
services rose by 1.5pp

9
Growth Sectors in the Northwest 1998-2003

The fastest growing sector in absolute terms
between 1998-2003 was renting, real estate
business activities which contributed 6.2bn to
Northwest GVA
The next largest contributors were wholesale
retail (2.6bn) and education (2.3bn)
Manufacturing fell by 752m and utilities and
other mining also contracted
In percentage terms construction was the fastest
growing sector 1998-2003 at 49.2, closely
followed by financial intermediation (48.6) and
education (48.4)

10
Sector Contribution to Northwest Growth 1998-2003

This chart illustrates the key drivers of growth
in the Northwest and compares them to the UK and
England as a whole
It describes the change in the structure of the
NW and national economies between 1998 and 2003
from manufacturing to services
The biggest driver for all three economies is
renting, real estate business activities which
accounts for 30.1 of all NW GVA growth and
around 1/3 of England UK growth
Strong growth in consumer spending is reflected
in the expansion of the wholesale retail sector
which accounted for 12.4 of NW growth

11
UK Manufacturing Region Winners Losers
1995-2003

Between 1995-2003 manufacturing in the UK grew by
just 4.5, whilst total GVA grew by 53.6. As a
result the share of manufacturing in the UK
economy fell by 7pp from 21.5 to 14.5
Growth in Northwest manufacturing was much lower
than the UK rate at just 1.3 between 1995-2003
As a result the Northwest share of UK
manufacturing fell by 0.8 to 12.7. The second
largest decline of any region, after the West
Midlands
Despite this loss of share, the Northwest remains
the lead manufacturing region, followed by the
South East and West Midlands

12
Northwest Leading Manufacturing Industries 2003

The three largest sectors chemicals, food,
drink tobacco and transport equipment
accounted for more than 2/5 of Northwest
manufacturing GVA in 2003
The chemical sector contributed 3.3bn (19),
food, drink tobacco 2.6bn (14) and transport
equipment 2.3bn (12)
The next two largest sectors pulp, paper,
publishing printing and coke, petroleum
nuclear fuels accounted for 1.7bn and 1.4bn
respectively

13
Northwest Manufacturing Sector Growth 1995-2003

Contribution to growth in GVA depends on the size
of the sector and its growth rate over the period
The fastest growing manufacturing sectors were
miscellaneous manufacturing (37.3), wood wood
products (33.5) and transport equipment (30.8)
The lead contributor to Northwest manufacturing
growth over the period was transport equipment
adding 547m to regional GVA
A number of manufacturing sectors experienced a
decline over the period. Electrical optical,
chemicals and textiles experienced the biggest
absolute losses

14
NWDA RESEARCH TEAM

THE NORTHWEST ECONOMY
2. Sub-Regional Accounts (NUTS 2) December 2005

15
The Sub-Regional Economy Key Points

The Northwest is characterised by wide
disparities at the sub-regional and NUTS 3 levels
Greater Manchester is the largest sub-regional
economy and accounted for 39 (38.3bn) of
Northwest GVA in 2003 whilst Cumbria was the
smallest sub-regional economy and accounted for
6 (6bn)
Merseyside was the fastest growing sub-region
between 1995-2003 at 50.4, over 5 faster than
the regional average
In terms of GVA per head, Cheshire is the most
prosperous of the Northwest sub-regions with GVA
per head of 17,658. This ranks the sub-regon
joint 6th of all UK NUTS 2 regions
Lancashire was the only sub-region to see an
increase in manufacturing between 1995-2003. The
sector added 294million to Lancashires GVA

16
Sub-Regional Shares of Northwest GVA 2003
17
Sub Regional Growth 1995-2003

Merseyside was the fastest growing sub-region
between 1995-2003 at 50.4, over 5 faster than
the regional average and just ahead of Greater
Manchester which grew by 50.1
Cheshire slightly outpaced the Northwest average
growing by 45.8
The more diverse economy of Lancashire grew
slower at 39.7 whilst Cumbria only achieved
growth of 23.2 over the period

18
Annual Sub-Regional Growth

Apart from Cumbria, annual GVA growth in the
sub-regions has been relatively stable over the
period, although all sub-regions experienced a
dip 1999-2000
Cheshire was the fastest growing sub-region at
the beginning of the period where growth peaked
at 6.2 in 1997
Growth in Cumbria declined sharply reaching just
0.2 in 1999. It has since recovered to reach
5.5 in 2003
Merseyside attained the fastest growth at the end
of the period at 5.9 in 2002 03
After peaking at 6.4 in 1988, growth in Greater
Manchester slowed slightly in recent years, and
stood at 5.5 in 2003
Lancashires growth rate climbed from a low of
3.3 in 1997 to reach 5.4 in 2001

19
GVA Per Head Northwest Sub-Regions

Figures for sub-regional GVA measure income
earned at the place of work, rather than where
people live. The adjustment to a per capita basis
reflects the resident population in the
sub-region
This will tend to boost the GVA per head of major
cities such as Manchester which draw their
workforce from a wide geographical area
Cheshire is the most prosperous of the Northwest
sub-regions and is ranked joint 6th of all UK
NUTS 2 regions
Merseyside and Cumbria have the lowest GVA per
head within the Northwest and are ranked 5th and
6th from bottom respectively of all UK NUTS 2
regions

20
Northwest Trends in GVA Per Head 1995 - 2003

GVA per head in Cheshire has been continually
higher than the NW UK averages. However, it has
fallen over the period from 14 above the UK
average in 1995 to 9 above in 2003
Cumbria has experienced a steep decline in GVA
per head from 93 of the UK average in 1995 to
76 in 2003
Lancashire has also seen a decline falling from
10 below the UK average in 1995 to 17 below in
2003
GVA per head in Merseyside has slightly improved
rising from 71 of the UK average in 1995 to 73
in 2003
Greater Manchester had followed a steady pattern
achieving GVA per head of 94 of the UK average
in 2003

21
Sub-Regional Contributions to Northwest Growth
1995-2003

Greater Manchester contributed over 2/5 of the
regions growth 1995-2003, reflecting both the
size of its economy and its strong performance
At the other end of the spectrum, Cumbrias low
growth rate and the size of its economy meant
that it accounted for only 3.7 of the regions
growth
For Merseyside Cheshire, and to a lesser extent
Lancashire, their contribution broadly reflected
the relative size of their economies

22
Cumbria

The smallest of the sub-regional economies,
Cumbria has faced difficulties between 1995 and
2003
Manufacturing contracted by 154 million over the
period which reduced the total GVA growth in the
sub-region to just 23.2, the lowest of any UK
NUTS 2 region
Unlike the other NW sub-regions, renting, real
estate business activities was not the best
performing sector over the period
Wholesale retail was the largest contributor to
adding 282 million to GVA between 1995-2003
Construction was next contributing 181 million
(16.1) to growth

23
Cheshire

Accounting for 18 of the regions economy,
Cheshire has benefited from strong growth in
renting, real estate business activities which
added 2.2bn (nearly 2/5) to GVA between
1995-2003
The high concentration of wholesale retail
(882m) to regional GVA reflects the prosperity
of the sub-region
Utilities saw the largest contraction in Cheshire
of 144 million over the period
Between 1995-2003 the Cheshire economy grew by
45.8, half a percent above the Northwest rate

24
Greater Manchester

Greater Manchester is the Northwests largest sub
region and accounted for 39 of regional GVA in
2003
Renting, real estate business activities was by
far the largest contributor to the sub-regions
GVA between 1995-2003 adding 4.3bn (nearly 1/3)
Manufacturing saw the largest contraction over
the period of 283 million
Greater Manchester has seen a strong growth
revival in the late 1990s, growing by 50.1
between 1995-2003

25
Lancashire

Lancashire is the second largest of the sub
regional economies and accounts for 1/5 of
Northwest GVA
The fastest growing sector was once again
renting, real estate business activities which
contributed 1.5bn to Lancashire GVA between
1995-2003
In comparison to other Northwest sub-regions
manufacturing performed well in Lancashire adding
294 million to GVA over the period
Between 1995-2003 the Lancashire economy grew by
39.7, 5.6 below the Northwest rate of 45.3

26
Merseyside

Accounting for 17 of Northwest GVA, Merseysides
economy expanded by 50.4 between 1995-2003,
making it the fastest growing Northwest
sub-region
Renting, real estate business activities was
the best performing sector growing by 1.6bn
between 1995-2003
Over the period, the public sector performed well
in Merseyside. Health social care was the
second best performing sector and added 741 to
sub-regional GVA
Manufacturing suffered the heaviest decline,
contracting by 115 million

27
Sub-Regional Contribution to Broad Sector Growth
1995-2003

This chart describes each sub regions share of
growth/ contraction in seven broad categories of
economic activity
In the primary sector, Cheshire Lancashire bore
the heaviest brunt of the contraction in farming
in the Northwest between 1995-2003. However,
because of their diverse economies, the impact
was less than in Cumbria which is more dependant
on agriculture
Lancashire was the only sub-region to see an
increase in industry over the period and Greater
Manchester gained markedly from the strong
expansion across all services
Merseysides punched above its weight in public
services where it accounted for over ¼ of the
regions growth 1995-2003

28
NWDA RESEARCH TEAM

THE NORTHWEST ECONOMY
2. Sub-Regional Accounts (NUTS 3) December 2005

29
NUTS 3 Regions Key Points

In 2003 Greater Manchester South (GMS) was the
largest NUTS 3 region, with GVA of 25.1bn or 25
of the Northwest total. This made GMS the 4th
largest NUTS 3 contributor after three London
sub-regions, accounting for 2.6 of the UKs
total GVA
In 2003 GMS, Halton Warrington and Cheshire CC
achieved GVA per head above the NW, UK England
averages.
With a predominantly commuting retired
population Wirral had the lowest GVA per head
within the Northwest and the 3rd lowest rate in
the UK at 9,653 or 60 of the UK average
GMS and East Merseyside by 63.8 and 56
respectively between 1995-2003 both outpacing the
UK and England rates
West Cumbria experienced the lowest growth
(18.6) between 1995-2003 which made it the 3rd
slowest growing UK NUTS 3 region after the
Shetland and Orkney Islands
Services accounts for over 80 of GVA in GMS,
Liverpool, Sefton and Blackpool

30
NUTS 3 Share of Northwest GVA 2003

Greater Manchester South (GMS) was the largest
NUTS 3 region, contributing 25.1bn to the
regional economy in 2003 25 of the total
reflecting both the size of its economy and its
strong performance
Greater Manchester South was also the 4th largest
NUTS 3 contributor after three London
sub-regions, accounting for 2.6 of the UKs
total GVA
The unitary authorities of Blackpool and
Blackburn with Darwen were the smallest Northwest
NUTS 3 regions, each contributing 2 to Northwest
GVA

31
GVA Per Head Northwest NUTS 3 Regions

Care needs to be taken when interpreting GVA per
head figures as GVA is workplace based, and the
headcount residence based. This boosts GVA per
head of major cities and under estimates the
prosperity of areas with high retired and/or
commuting populations, e.g. Wirral and Sefton
In 2003 three Northwest NUTS 3 regions, GMS,
Halton Warrington and Cheshire CC achieved GVA
per head above the NW, UK England averages
Liverpool achieved GVA just above the NW figure
but below the national levels
Wirral with a predominantly commuting retired
population had the lowest GVA per head of all NW
NUTS 3 regions and the 3rd lowest rate in the UK
at 9,653 - nearly ½ the rate of GMS

32
GVA NUTS 3 Growth Rates

The Northwests GVA grew by 45.3 between
1995-2003, 8.3pp below the UK rate
GMS and East Merseyside both outpace the UK and
England over the period and grew by 63.8 and 56
respectively
Halton Warrington grew just 0.3pp below the
England rate
The lowest growth occurred in West Cumbria which
grew by only 18.6 between 1995-2003. West
Cumbria was the 3rd slowest growing UK NUTS 3
region after the Shetland and Orkney Islands

33
NUTS 3 Trends in GVA Per Head 1995-2003

GMS, Halton Warrington and Liverpool were the
only NW NUTS 3 regions to experience a consistent
rise in their GVA per head index over the period.
GMS enjoyed the highest rise of 11pp between
1995-2003
The three areas that experienced the slowest
growth in GVA between 1995-2003, West Cumbria,
Blackburn with Darwen and East Cumbria
experienced steep declines in their GVA per head
index, each falling 17 or 18pp
West Cumbria experienced a decline in its GVA per
head index despite a 1.4 fall in its overall
population 1995-2003
East Cumbria on the other hand experienced a
population rise of 2.6 whilst the population in
Blackburn with Darwen remained relatively static

34
GVA Broad Sector Shares 2003

The service sector accounted for over 80 of GVA
in the core city areas of GMS and Liverpool where
business and financial services are big drivers
of GVA
Services also accounted for over 80 of GVA in
Blackpool where personal services and tourism are
strong
Industry plays the most significant role in West
Cumbria and Blackburn with Darwen which derived
46.5 and 37.7 of their GVA respectively from
industry in 2003
Agriculture made a particularly high contribution
to GVA in the two Cumbrian areas with East
Cumbria gaining 3.9 of its GVA from agriculture
and West Cumbria 2.3