3.4.9 The level of economic activity measures the size of the potential labour force and, as discussed above, includes those in employment, self-employed and unemployed (who are actively seeking and available to work). People choose to withdraw from the labour market for a wide range of reasons, including early retirement, full-time education, family commitments, long term illness or disability. The economic activity rate (i.e. the proportion of the population that is economically active) is a useful measure of labour market opportunities as lower rates can be indicative of poor employment opportunities and large numbers of discouraged workers (see economic inactivity section).
3.4.10 There are 2.6 million economically active people of working age in the South West, with the region having the third highest economic activity rate in the country (78.4%) after the South East (79.1%) and East (78.8%), and 1.9 percentage points above the English average. This high rate of activity implies a strong, flexible labour market with a relatively low number of discouraged workers. The comparably large number of older people in the region, means the South West activity rates rank lower when those over retirement are included - the region ranks fifth out of the English regions for the activity rate for all those aged 16 and over.
3.4.11 Male economic activity rates are higher than for females across the country, supporting the notion that many women choose to opt out of the labour market to look after children. The largest difference in gender activity rates is seen in London where male rates are 14.8 percentage points higher than for females. The South West has the second smallest ‘gap’ (11.3 percentage points) of the English regions, substantially lower than the English average of 12.7 points.
Figure 3.4.2 Economic Activity Rate by Age/Working Age July 2009 - June 2010
3.4.12 Economic activity rates are higher in the region across all age groups compared with nationally (see Figure 3.4.2). This suggests that overall the region provides a good level of flexible labour market opportunities. While overall activity rates are lower for females and the 16-19 age group, the rates in these groups are comparatively high in SW England.
3.4.13 Between 2000 and the onset of the recession, the regional activity rate fluctuated between 78.7% and 81.0%. During the recession, activity rates fell only slightly reaching a low of 77.7% in January 2010. This may be a sign that some people were forced or were choosing to leave the labour market as a result of the recession, although there was a slight lag between the initial upturn in unemployment and the downturn in the economically active population. Activity rates rose slowly during 2010, suggesting that the recovery has, so far, brought some optimism and workers are re-entering the economically active population.
3.4.14 Sub-regional Economic Activity: Economic activity levels vary across the South West sub-regions. Due to a limited sample size, the sub-regional economic data is less robust and confidence limits are high, particularly for small, rural districts. Within this generally strong picture, Bournemouth and Cornwall have the lowest economic activity rates in the region - less than 75% of the working age population in these areas are economically active. These low rates partly reflect the adverse effect of the recession on employment in these areas. Torbay has the third lowest working age economic activity rate (74.9%). The highest sub-regional activity rates are in South Gloucestershire, Swindon and Wiltshire which all have rates of 82% or above.
Figure 3.4.3 Economic activity rate by County and Unitary authority: Working age, July 2009 - June 2010
