Today we released our third Regional Growth Tracker, which provides estimates of economic growth for almost 140 regions of the UK. Why do this? We believe it is important for two reasons. First, many of our customers have told us that they want to hear about both the national economic picture and what's going on around where they live and work. Second, the UK's local area economies have had very distinct fortunes over the past 15 years and we feel it is important to try to track these.
Take the most striking observation. The UK's largest local area economies have, on average, been growing faster than the smaller ones. This is also true whether one looks at productivity or measures of economic advancement, such as average income. And it is not just Inner London that belongs to this elite group. Places such as South Manchester, Bath, Bristol, Glasgow Ciy, Leeds, Surrey and Oxfordshire have also pulled away.
Why has this happened? Part of the answer is that these regions have been very reliant on sectors that have been the fastest growing, such as business services. The other part is that the individual sectors in these regions have been, on average, more productive than their peer groups, something we refer to as a "competitiveness effect".
Our Growth Tracker is built upon these two ideas. First we look at the mix of industries in a region and estimate the growth that we would expect to prevail given what has happened to the UK as a whole. Second, we look at the historical over or under performance of regions and adjust our growth estimates to reflect this; a "competitiveness adjustment", so to speak.
We then compare our results with information from other sources, regional business surveys, regional earnings and unemployment and regional business demography to try to build an up to date picture of how the UK's local areas are faring.
Our Regional Growth Tracker's results for Q3 2014 can be found here. We'd love to hear what you think.