Key Themes (Economy, State of the South West 2011)

2.1.1 The South West (SW), in common with the rest of the United Kingdom, experienced a long period of economic growth between the early 1990s and 2008. The country then experienced a six month contraction in output up to the third quarter of 2009 - the longest period of recession since 1955 (when quarterly GDP figures were first collected). A modest recovery is now underway but a number of factors will constrain growth with rates expected to remain subdued for some time.

2.1.2 Nominal Gross Value Added (GVA) growth rates were negative across the country in 2009, though South West England exhibited a relative degree of resilience.

2.1.3 The recession affected the South West economy, with a contraction in manufacturing, construction and related business services output. Areas with a reliance on the manufacturing sector were hit particularly hard (Swindon, Torbay and areas in the Bristol conurbation), while other areas have been less severely affected to date (Bournemouth & Poole, Dorset and Devon).

2.1.4 Overall, South West England is a relatively productive, wealthy region, with an attractive physical environment. The region performs well compared with the other English regions and on a number of indicators (including GVA per head and Gross Disposable Household Income (GDHI) per head) trails only the Greater South East.

2.1.5 South West England scores particularly well on composite measures of well-being which include environmental and social factors.

2.1.6 The SW region continues to experience a ‘productivity gap’ with the most productive areas in England (the Greater South East). This gap can be attributed to industrial composition, differences in firm size, higher levels of part-time working, skills gaps and time/distance from some of the UK’s major markets.

2.1.7 The region benefits from a comparatively well-qualified population, although there remain gaps in certain areas and sectors. In addition, some of these skills may not be utilised as effectively as they might.

2.18 The region has high rates of business survival and performs well on some measures of innovation and investment. SW firms are less engaged in international trade, with the region's exports being concentrated in a relatively few key sectors.

2.19 Wide intra-regional differences exist for many economic indicators including productivity, incomes, skills, enterprise and innovation. The northern part of the region is the main engine for growth with urban centres exhibiting high levels of productivity supported by high-level skills, innovation and enterprise. In other words, it is able to capture more of the benefits of agglomeration. By contrast, some areas – particularly the rural and more peripheral parts – perform considerably less well than other parts of the region and the country.