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

Abstract

SummaryThis 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. Focus on differences in sub-regional economic growth (NUTS2 and NUTS3 regions)The August edition of the Regional Economic Indicators (REI) article focussed on differences in economic growth in NUTS1 regions by using the shift-share method. This article takes this analysis to a lower geographical level by examining economic growth across UK sub-regions over the 1995 to 2007 period. It evaluates the performance of the 37 NUTS 2 sub-regions and the 133 NUTS3 areas by using the shift-share method. Looking at these lower geographical levels enables identification of those smaller areas which have been slowing down or accelerating the economic performance of NUTS 1 regions.The shift-share is a popular technique in regional analysis that examines economic change in a region by splitting the growth of its GVA into three additive components: the reference area such as the national economy effect, the structural effect and regional competitiveness (see Box 1). By applying shift-share analysis to GVA growth in a region one can determine how much of the regional GVA growth may be attributed to the unique local factors and how much of it is due to the national business cycle and the national performance of specific industries.Office for National Statistics 64

The Spectrum of Threats of Regional Economic Security

“…During the last two decades, numerous practical assessments of the levels of economic security of the regions have been carried out [1][2][3][4][5][6][7][8][9][10][11][12]. In the study, we used the most common and frequently used indicators.…”