Regional Economic Indicators: with a focus on sub‐regional Gross Valued Added using shift‐share analysis

Abstract

This quarter, the Regional Economic Indicators article focuses on explaining the differences in sub‐regional economic growth rates (Gross Value Added (GVA)) between 1995 and 2007 by using the shift‐share method. The technique is based on the assumption that local economic growth is explained by the combined effect of three components: national growth, industry mix or structural effect, and local competitiveness. Thus, one can apply shift‐share to determine how much each component contributes to local economic growth. The regular part of the article then gives an overview of the economic activity of UK regions in terms of their GVA, GVA per head and labour productivity. This is followed by a presentation of headline indicators of regional welfare, other drivers of regional productivity and regional labour market statistics. The indicators cover the nine Government Office Regions of England and the devolved administrations of Northern Ireland, Scotland and Wales. These 12 areas comprise level 1 of the European Nomenclature of Units for Territorial Statistics (NUTS level 1) for the UK. The term ‘region’ is used to describe this level of geography for convenience in the rest of this article.