Newly released figures from the Office for National Statistics (ONS) paint a concerning picture for parts of North Wales, revealing significant disparities in productivity across the region. The data, which measures Gross Value Added (GVA) per hour worked—a key indicator of economic productivity—places several North Wales areas near the bottom of the UK table. Despite a slight improvement overall, Wales remains the lowest-ranked UK nation in terms of productivity.
Stark Regional Differences
The latest statistics show that in 2022, GVA per hour worked in Wales was 82.7% of the UK average, a marginal increase of 0.8 percentage points from the previous year. However, this still leaves Wales trailing behind other regions in the UK. When examining sub-regional areas, parts of North and Mid Wales emerge as particularly concerning. Powys, for example, recorded a GVA per hour at just 63.1% of the UK figure, placing it at the very bottom of the national table.
Similarly, Gwynedd and Conwy and Denbighshire—whose figures are combined—ranked third and fourth lowest, with GVA per hour worked at 69.3% and 71.1% of the UK average, respectively. These areas are significantly impacted by sectors known for lower GVA contributions, such as tourism and hospitality.
Sectoral Impacts and Economic Composition
A 2022 study by the Centre for Regional Economic and Social Research at Sheffield Hallam University identified accommodation and food services as having the lowest GVA per job in the UK, followed closely by health and social work. This finding is particularly relevant for Gwynedd, where 16% of enterprises are in the tourism industry, the highest proportion in Wales, compared to the national average of 11%.
The tourism sector, crucial to the economies of Gwynedd and Conwy, has faced unprecedented challenges. The aftermath of the COVID-19 pandemic and the ensuing cost of living crisis have severely impacted disposable incomes, leading to reduced spending on holidays and leisure activities.
Bright Spots in North Wales
However, not all areas in North Wales fare poorly. Flintshire and Wrexham, for instance, are the highest-ranked Welsh areas for both GVA per hour and GVA per job, standing at 95.1% and 93.6% of the UK figures, respectively. This performance is attributed to the robust manufacturing sector in North East Wales, which offers higher value jobs and has shown consistent growth since 2004.
A business council representative highlighted this dichotomy, noting that while the manufacturing sector in Flintshire and Wrexham is thriving, the heavier reliance on lower-wage sectors like care, tourism, and hospitality in areas such as Gwynedd, Anglesey, and Conwy/Denbighshire has resulted in stagnant or declining GVA figures. There is a need for more detailed analysis at a sectoral level to better understand and address these disparities.
Strategic Recommendations
The business council suggests that enhancing transport connectivity and providing more training opportunities could help improve productivity in these areas. Developing sectors such as the Anglesey Freeport and the Wrexham & Flintshire Investment Zone, alongside initiatives like the North Wales Growth Deal, are seen as crucial steps forward. Additionally, supporting tourism businesses in transitioning to more premium offerings and year-round operations could boost GVA per job. All these efforts should align with environmental sustainability goals.
Economic Context and Government Response
An academic expert cautioned that the data reflects conditions up to 2022, a period marked by the slowing economic recovery post-COVID-19 and soaring inflation rates. By October 2022, UK inflation had reached a 41-year high of 11.1%, affecting both businesses and households. This economic strain is evident in the latest GVA figures, particularly in sectors sensitive to changes in disposable income, such as tourism.
A Welsh Government spokesperson emphasised ongoing efforts to bolster the regional economy. “Our plan for boosting the Welsh economy is set out in our Economic Mission and Regional Economic Frameworks. We are collaborating with partners in North and Mid Wales to capitalise on the unique strengths of these regions and to ensure they benefit from the transition to a stronger, greener economy. This includes significant funding commitments for the North Wales Growth Deal (£120m) and the Mid Wales Growth Deal (£55m), matched by the UK Government.”
The GVA figures underscore the need for tailored economic strategies to address the unique challenges faced by different regions within North Wales. While some areas are thriving, others lag significantly, necessitating targeted interventions to promote balanced economic growth. As Wales continues its journey towards economic recovery and transformation, the focus must remain on leveraging local strengths, fostering innovation, and ensuring inclusive and sustainable development.
In conclusion, while the latest GVA figures present a mixed picture for North Wales, they also highlight areas of potential and pathways for improvement. With strategic investment and concerted efforts, there is hope for a more balanced and prosperous economic future for all parts of the region.
