Wednesday, December 15, 2010
NORTH EAST WALES - A MANUFACTURING POWERHOUSE IN DECLINE
With global companies such as Toyota, Airbus and JCB located in the area it has, in the past, been rightly described as one of the main manufacturing regions of the UK. However, the region has performed the worst of all the areas in Wales over the last decade.
If we examine what has happened to the prosperity of the region since 1999, we find that the relative GVA/head has fallen from almost parity (99.3 per cent) to 84.6 per cent in 2008.
That is the largest drop in GDP/head of any part of Wales.
Not surprisingly, overall GVA has grown by only 31 per cent during 1999-2008, the worst performance of any part of Wales. In contrast, the overall Welsh economy grew by 47.2 per cent over the same period.
So what has happened?
Back in 1999, the production sector accounted for 47.2 per cent of the Flintshire/Wrexham economy as compared to 27.8 per cent of the Welsh economy. By 2008, this had fallen to 37.4 per cent. Whilst nearly twice the level for the Welsh economy, this decline has not been matched sufficiently by growth in other sectors.
Most notably, it would seem that whilst being the most populous part of North Wales, there has been very little growth in the public sector within the region. For example, whilst the contribution of the public sector to the overall Welsh economy grew from 26.9 per cent to 30.7 per cent between 1999 and 2008, the relative contribution in North East Wales grew from 18.3 to 19.3 per cent.
Therefore, whilst the rest of Wales benefitted from the largesse of the Labour Governments in Westminster and Cardiff Bay, Wrexham and Flintshire did not.
Of course, the real question is whether the area is still sustainable as a manufacturing base or will it continue to decline? Certainly, the fact that, during this period, the area did not qualify for the highest level of European grant probably made it more difficult to attract other inward investors to the region.
At the same time, it does demonstrate a failure by WAG to capitalize on the strong manufacturing base already within the region and ensuring that it not only stayed but actually expanded. Certainly, the powerhouses that were the Deeside and Wrexham Industrial Parks are a shadow of what they were in the 1990s.
The question for WAG is whether it should designate North East Wales as a “manufacturing zone” for Wales and look to develop a coherent strategy for its growth and development. Certainly, with nearly 40 per cent of the economy dependent upon production industries, there is at least a base from which it can grow, and if the UK Government is serious about the revitalizing the manufacturing industry, then there is no reason why Wrexham and Flintshire shouldn’t be at the vanguard of such a policy.