Regional difference in UK productivity visually explained

The Office for National Statistics (ONS) has presented a new way of highlighting the regional differences in productivity and income in the UK.

By using the interactive maps from their article What are the regional differences in income and productivity? we can visually explore economic equality in the UK and see how due to the effect of commuting, those that have the highest income are not always those that contribute the most to the UK economy.

The highest and lowest income areas

Higher income areas were mainly Cheshire, East Cumbria, North Yorkshire, Edinburgh, Aberdeen and the East of Scotland. In central London, areas like Kensington, Westminster, Fulham, Chelsea, Hammersmith and Camden and City were particularly high.

The lowest income areas were mainly in the North West, West Midlands and North East like Manchester, Birmingham and Nottingham.

This can be explained by the “commuter effect” – for example many people who live in Worcestershire or Warwickshire, where the highest income rates are shown, commute to places with the lowest like Birmingham.

Productivity hot spots outside London

In England, manufacturing car hubs outside of London, such as Sunderland, Swindon and Solihul report high levels of productivity. Low productivity areas include rural areas like East Sussex and Somerset but there are urban towns like Oldham and Rochdale in the North West where productivity is also low.

This could relate to a north/south divide as figures show that in the south of England and the West Midlands incomes tend to exceed productivity. Elsewhere they do not.

Spotlight on Wales and Scotland

Of the 168 sub-regions in Britain, 95 were below the overall levels of productivity and income for the UK. This included Wales where all parts of the region were below UK average productivity. Powys had the lowest productivity of all sub-regions in Britain.

Despite the implementation of various economic strategies from the Welsh government, low productivity has remained a feature of their economy even before the establishment of devolved government in 1999. However its highest areas of productivity are in the south, the most urbanised and densely populated part of Wales, exacerbating a similar north/south divide.

As a financial and legal centre, Edinburgh enjoys productivity and income well above the UK average but disparities in the productivity levels of Scottish regions are significant. Fourteen of Scotland’s 23 regions had below average income and productivity. Glasgow has the lowest household income of all the regions and the eighth lowest productivity overall. But there are high productivity and incomes around Aberdeenshire which is the centre of the North Sea oil industry.

The Productivity Institute’s Regional Productivity Forums were established to work closely with business leaders to understand what the productivity issues are, where further research is needed and identify and test practical business interventions.

This summary is based on the interactive article from the Office of National Statistics (ONS) What are the regional differences in income and productivity? published on May 17, 2021.