ONS article investigates economic productivity in urban versus rural areas

Office for National Statistics logoContrasts in the economic productivity of urban versus rural local authorities, and the factors contributing to the varying performance of the economies of English regions, are both the subject of an article in the latest edition of Economic & Labour Market Review.

The article in the ONS publication takes a detailed look at Gross Value Added per filled job (GVA per job) statistics for groups of local authorities in each English region, using DEFRA classifications (PDF, 52kb) which group local authorities according to their urban/rural composition characteristics.

In the West Midlands region and among the six local authority classifications, ‘Major Urban’ local authorities (for example, Birmingham) were found to be the most productive, with GVA per job averaging an indexed value of 90.4 (where England=100) for 2004 to 2006. However, this represented a noteworthy decline from the value of 95.8 recorded in 2001 to 2003.

The least productive group was the ‘Rural 80’ local authorities (for example, Wychavon), with an indexed value of 81.4, although this was a marginal increase on the 2001 to 2003 figure of 80.8.

The ‘Rural 50’ group of local authorities (for example, Malvern Hills) recorded the largest improvement in productivity relative to England, with the indexed value rising from 85.6 in 2001 to 2003, to a value of 87.1 in 2004 to 2006.

After investigating the differing performances of groups of urban and rural local authorities, the article attempts to explain the differences in productivity between the English regions by contrasting individual regional performances among the five main drivers of productivity as identified by HM Treasury and BERR:

  • Investment
  • Innovation
  • Enterprise
  • Competition
  • Skills

The article includes a range of charts and tables which illustrate how, overall, the West Midlands is trailing the majority of other English regions, when the metrics which gauge the region’s performance among the five drivers of productivity are assessed – and particularly in comparison to London and the South East.

Other noteworthy articles in this September edition include a regional analysis of public sector employment, and an article from ONS National Accounts which detail the planned methodological changes intended to improve national Gross Domestic Product (GDP) estimates – a key measure of the strength of the economy.

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