And whilst some have been quick to dismiss GVA as the main measurement of the wealth of the economy, it is still seen as the gold standard by which the majority of economists view the relative affluence of nations and regions. Indeed, the European Union will soon use it to decide whether the poorest parts of Wales will, for potentially the third time, receive billions of pounds in additional funding for economic and community development.
So what has been the performance of the Welsh economy in 2011?
In terms of relative GVA/head of population, it would seem that the Welsh economy (1.9 per cent growth) has expanded at a higher rate than the UK (1.4 per cent growth), with only South East England and Northern Ireland growing at a faster rate in the period 2010-2011. However, despite this improved performance, Wales remains the poorest part of the UK although it may well overtake the North East of England within the next few years.
Whilst there is scope for optimism in these new economic figures, this growth is not uniform across Wales. For example, the poorest part of the economy - West Wales and the Valleys - has grown at a slightly faster rate than the more prosperous East Wales (which includes Cardiff and the Vale of Glamorgan, Newport and Monmouthshire, Wrexham and Flintshire, and Powys).
This could suggest that the various European Structural Funding programmes are finally beginning to have an effect on the poorer parts of Wales, although this does vary across the region.
For example, if we look at the relative growth across Wales since the highest levels of European funding was granted to Wales in 2000, only three counties – Anglesey, South West Wales and Bridgend/Neath Port Talbot – have grown at a faster rate than the UK economy over those eleven years. Indeed, whilst the Welsh economy has grown at an average of 48 per cent during this period, areas such as the South Wales Valleys have grown at a far lower rate despite having access to additional funds for economic development.
However, the biggest disappointment for both politicians and policymakers must be the decline in relative growth of the more prosperous parts of the economy since 1999. Whilst GVA/head has decreased by 1.4 per cent for the whole of Wales, it has actually gone down by 5 per cent for East Wales since the birth of the National Assembly for Wales.
Some would argue that by focusing resources predominantly on the less wealthy parts of Wales, economic development policies have neglected those parts of the economy that could have the greatest potential and capacity for growth. Certainly, some parts of East Wales have shown a dramatic decline in economic fortunes over the last thirteen years. In particular, the mid-Wales county of Powys has seen a fall of over 10 per cent in its GVA/head to a level that would, if the Welsh Government wanted to make the case, make it eligible for inclusion in the next round of European Convergence Funding for the poorest parts of Wales.
There has been much discussion of late about the potential role of cities as the economic drivers for the future Welsh economy. Analysis of the GVA data suggests that, to date, that role has yet to be realised and, contrary to expectation, the main urban areas of Wales – Cardiff, Swansea and Newport - have only grown at an average of 1.6 per cent as compared to 2.2 per cent for the rest of Wales between 2010 and 2011. Indeed, their growth rate since 1999 is also lower than the average for Wales.
Certainly, if their performance could be improved considerably over the next few years, then there could be a significant impact on the Welsh economy. In fact, some would argue that the city regions approach to economic development recently proposed by the Welsh Government needs urgent action if the full potential of Wales’ three cities are fully realised for the economy.
And what about North Wales?
Since the creation of the National Assembly for Wales in 1999, the Welsh economy has grown by 54 per cent. In contrast, the economy of North Wales has had a growth rate of only 51 per cent This is disappointing, given that there have been concerns that the region has not been receiving the necessary funding required to help build up its economy.
But this figure actually hides a more worrying statistic over the relative wealth of both parts of the region.
For example, the poorest four counties – Anglesey, Conwy, Denbighshire and Gwynedd have grown by 59 per cent during this period, which is higher than the Welsh average. In contrast, the two counties of Flintshire and Wrexham have only experienced a growth of 43 per cent since 1999. Indeed, whilst GVA/head has decreased by 1.4 per cent for the whole of Wales, it has actually gone down by 6 per cent for North East Wales since the birth of the National Assembly for Wales.
Some would argue that by focusing resources on the less wealthy parts of Wales such as those in receipt of European funding, economic development policies have neglected those parts of the economy that could have had the greatest potential and capacity for growth.
Certainly, in the light of the decision not to recommend a city region for North East Wales, many will be asking when the Welsh Government will start to consider how it should address the relative decline in the prosperity of Wrexham and Flintshire.
Therefore, I would imagine that most politicians and policymakers in Wales are heaving a quiet sigh over relief over the headline figures for the relative prosperity of the Welsh economy, especially given the uncertainty that has been caused by recent recessions. However, more detailed analysis shows that there are still challenges that remain in certain parts of Wales, not only in terms of raising prosperity but in using the resources available to drive forward in economy in those areas that have the highest potential for growth.