2 Economy

Issues and Priorities

  • The South West England economy broadly follows trends seen in the national economy. It has gone through a period of sustained growth since the early 1990s.  However, a slow down in economic growth regionally (and nationally) is expected in 2008/09.
  • South West England is a relatively productive and wealthy region with an attractive environment that has encouraged high levels of net inward migration.
  • The South West region has a 'productivity gap' with England’s most productive regions - London and the rest of the Greater South East 1 . This gap has been attributed to relatively low levels of capital stock, differences in organisational structure, higher levels of part time working, skills gaps and the time/distance from some of the United Kingdom’s major markets.
  • The region is characterised by wide intra-regional differences in terms of output, productivity and the drivers of productivity – competitiveness, enterprise, innovation, investment and skills. The northern part of the region is the main economic engine for growth, with its urban areas consistently experiencing amongst the highest productivity levels in the United Kingdom in recent years. There are clear imbalances across the region however, with some areas, particularly rural and peripheral areas, performing far less well the rest of the country.
  • Levels of household income are close to the national average and the difference across the sub-regions is considerably lower than those for productivity. Inter and intra-regional living standards are closer than the economic output data would suggest, due to redistribution of wages and other sources of income, for example, through commuting.
  • South West England's economy benefits from relatively high rates of business stock and the region also fairs well on both investment and employment in Research & Development (R&D). The South West has a skilled workforce, although it has some problems with basic and advanced skills. However, the region’s stock of capital is relatively low and its international trade performance is modest - relatively little output is exported and exports are concentrated in only a few sectors, particularly aerospace, and markets, particularly the EU.