ONS figures show 2.7 per cent increase in value of goods and services in LEP area
The North East Local Enterprise Partnership (LEP) today welcomed the latest official figures showing economic growth across the LEP area.
The Office for National Statistics (ONS) Gross Value Added (GVA) data measures the increase in the value of the economy, based on the production of goods and services.
In the North East LEP area, total annual GVA increased by 2.7 per cent to £35.5 billion. The data, which refers to 2014, showed that although the growth rate dipped slightly from 3.4 per cent the previous year, it still remains strong with almost £1 billion added to the value of the economy.
In the past three years, North East is one of just four regions along with Yorkshire and The Humber, East of England and London to have recorded increasing growth in successive years.
When looked at in a broader context, the North East LEP area’s GVA has increased by 13 per cent since 2004 and by 34 per cent since 2008. The region has recovered well from the impacts of the recession since 2010 and the economy has grown by an average of three per cent year-on-year.
Overall, the North East LEP area accounts for three-quarters of the region’s GVA and is responsible for 2.2 per cent of the UK’s GVA.
GVA expansion in the LEP area was driven by Sunderland and Tyneside, which both recorded very strong growth rates. The biggest increase was in the distribution, transport and accommodation sector, which jumped by 10.1 per cent compared to the previous year to a value of £595 million, and accounts for 16.5 per cent of the area’s GVA.
There was 9.9 per cent or £256 million increase in business service activity, and the construction sector GVA grew by 7.1 per cent or £142 million. Real estate activities were up by 3.7 per cent or £136 million, and manufacturing by 1.9 per cent or £100 million. Production, including manufacturing, remains an important sector, contributing around 19 per cent of GVA in the LEP area.
However, there was a 3.4 per cent or £311 million fall in the public sector areas of public administration, education and health, which make up 27 per cent of the LEP area’s economy.
North East LEP chief economist, Chris Milne, said: “It’s encouraging that we’ve seen growth for the North East economy over the past few years, following the recessionary period.
“If we can sustain this growth, it will help us move towards our aims for more and better jobs for the region.
“We’ve seen strong growth in some of our key sectors, including those which support growth for the economy as a whole, such as business services and those that demonstrate investment is taking place, including construction. The shrinkage we’ve seen in the public sector has been more than compensated for by the growth of the private sector, which is excellent news.”
Nationally, London recorded the biggest increase in GVA in 2014 with growth of 5.3 per cent and Northern Ireland the lowest, at 1.9 per cent.
The ONS bases its calculations on income generated by individuals and businesses producing goods and services.
In the North East region as a whole, GVA per head was £18,216 compared to the UK average of £24,616 in 2014. Although GVA per head in the North East was relatively low, growth has outperformed a number of other UK regions over the past year.