Output: GVA
2.14 GVA is a measure of economic output and is calculated as the value of final goods and services produced in an economy plus subsidies minus taxes. For any given region or sector, GVA is the difference between output and intermediate consumption – the value added to a good or service by that sector or region. GVA is also used as the numerator in measuring regional productivity. The following analysis in this section is at current basic prices – i.e. it includes growth due to price inflation - due to the unavailability of regional deflators 2 .
2.15 The SW economy was estimated to be worth around £90 billion in 2006. This is 9.3% of English GVA, ranking the South West as the fifth largest economy of the nine English regions. The region’s share of national GVA has increased from 8.9% in the early 1990s, showing that the South West’s economy is growing faster than some other regions. Output has grown at an annualised rate of 5.7% since 2001, the second (equal) largest increase of any region and greater than for England as a whole (5.4%). Reflecting the national economic cycle, GVA annual growth rates in 2005 and 2006 were lower than experienced at the beginning of the decade and in the mid- to late-90s. Broadly, the SW economy is expected to continue to mirror national economic trends. Given current structural and policy factors, the region should slightly outperform the English average.
2.16 Sub-regional Performance - Some of the historically under-performing sub-regions in the South West have experienced relatively fast rates of growth in recent years. This is particularly true in Cornwall and the Isles of Scilly which experienced annualised growth rates of 7% between 2000 and 2005, suggesting that the high levels of investment (leveraged by EU funding) appear to have had a positive effect on the Cornish economy. Though depressed by relatively low growth across the region in 2005, this was well in advance of the South West’s 5.8% average. Torbay, by contrast, experienced the slowest annualised growth rate over the same period (3.8% per annum) due largely to significant losses in its manufacturing capacity at the beginning of the millennium.
2.17 Cities and other large urban areas are the economic drivers of regional and national economies. In the South West, this is reflected by some of the highest annualised growth rates between 2000 and 2005 being noted in the (Bristol) commuter belt areas of Gloucestershire (6.7%) and North and North East Somerset (7.4%). Swindon however, which was an engine for growth in the eastern part of the region in the 1990s, and is still the most productive SW sub-region, slowed significantly over the same period, having the second lowest sub-regional annualised growth rate (4.6%). As with Torbay, this was due in part to global pressures exerted after the ‘dot com’ boom and bust.
