Economy of Wales

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Economy of Wales
Golygfa gyffredinol Bae Caerdydd.jpg
Cardiff: Wales's capital city
CurrencyPound sterling (GBP)
Statistics
GDPIncrease£77.5billion (2019) [1]
GDP growth
Increase2.7% (2019)[1]
GDP per capita
Increase£24,586 (2019)[1]
Population below poverty line
Steady23% (2020)[2]
Labour force
Increase1.428 million (September 2015)[3]
UnemploymentPositive decrease3.9% (July 2021)[4]
Main industries
Agriculture, aerospace, construction, electronics, emergency services, food, forestry, manufacturing, oil and gas, renewable energy, services, textiles, tourism, transport
External
ExportsDecrease £13.4 billion (2020)
(2019: £17.7 billion)[5]
Export goods
Aerospace systems, business and financial services, cereals, chemical products, dairy products, electricity, electronics, iron and steel, machinery, oil and gas, pharmaceuticals, plastics, renewable energy, road vehicles, textiles, timber, water
Main export partners
Excluding the rest of the  UK

All values, unless otherwise stated, are in US dollars.

The monetary policies which create the economy of Wales are, on the whole, created by the United Kingdom Government and as such, Wales is not allowed to borrow money, issue bonds, exercise quantitative easing etc. In 2017, the area of lowest income in Northern Europe was West Wales. This featured alongside nine other regions of similar income lying in England and mainland Europe.

The percentage of all individuals, living in relative income poverty in Wales in 2016–17 was 23%, compared to 22% in England, and only 19% in Scotland and Northern Ireland. More than one in five people in Wales were living in poverty between 2001 and 2016.[6][7]

However, in 2018, according to OECD and Eurostat data, gross domestic product (GDP) in Wales was £75 billion, an increase of 3.3% from 2017. GDP per head in Wales in 2018 was £23,866, an increase of 2.9% on 2017. This compares to Italy's GDP/capita of £25,000, Spain £22,000, Slovenia £20,000 and New Zealand £30,000.[8][9] In 2019 Wales generated tax revenue of £27bn, which is around 36% of GDP, and has expenditure of £40.1bn, leaving an deficit of £13.1bn.

Economic history[edit]

Quarrymen working at the Dinorwic Quarry in about 1910
A profile of the economy of Wales in 2012

18th century[edit]

Until the mid 18th century, economic development in Wales was restricted by its peripheral location, predominantly upland topography, bad communications and sparse population.[10] Commerce was most advanced in the small coastal ports that had regular commerce with Bristol or Liverpool; the other major sources of external trading contact were the drovers, who drove cattle from Mid Wales along Drovers roads for sale and slaughter in the English Midlands and London's Smithfield Market from the 14th century onwards. The drovers were instrumental in establishing the first banks in Wales, such as Banc Y Ddafad Ddu ("Black Sheep Bank") in Aberystwyth.[10]

Industrial development from the mid 18th century was stimulated by the potential of Wales' rich mineral deposits, the arrival of English entrepreneurs and financiers and advances in technology. The development of iron smelting by coke made the South Wales Valleys a natural industrial location during the Industrial Revolution and, from the mid 18th century, increased demand for metals and coal was generated first by war and later by the advent of steamships and railways.[10]

The northern rim of the South Wales Coalfield, focused on Merthyr, became Britain's foremost iron-producing district in the second half of the 18th century, while the south-western part of the coalfield, around Swansea, emerged as an important centre of non-ferrous metal smelting and tinplate production. Metallurgical industries required ever increasing quantities of coal, which was initially largely mined for this purpose. However, coal mining for sale developed in earnest from the mid 19th century and this was to become the signature industry of the region, transforming the economic and social landscape of the South Wales Valleys.[10]

19th century[edit]

Although a much smaller industry than coal, the slate industry in Wales became the world's largest supplier in the 19th century and had an enduring impact on the landscape of North Wales.[11] At its height in the 1890s, there were dozens of quarries employing around 15,000 men, although they suffered from the boom and bust nature of the construction industry.[11] As most of the workforce were drawn from rural, Welsh-speaking communities, slate quarrying was described by one historian as "the most Welsh of Welsh industries".[11]

20th century[edit]

Despite explosive growth in the early 1900s, by the 1920s it was apparent that Wales was facing economic difficulties, largely because of its reliance on older heavy industry rather the newer, growing light industry sectors that were becoming established in the more prosperous parts of England.[12] Even during a boom period at the start of the 20th century, Wales had a narrow economic base dependent on the labour intensive exploitation of natural resources. The Welsh export economy collapsed during the inter-war recession, a victim of increasing protectionism and the rise of new competitors overseas. As global terms of trade changed, unemployment in the South Wales Valleys soared to unprecedented levels during the early 1930s (up to 59% in Merthyr and 76% in Pontypridd), despite the exodus of 400,000 people from the region between 1921 and 1939.[13]

In the post-war era, the steel and tinplate industries consolidated on a smaller number of larger sites, such as the new works at Port Talbot and Llanwern.[14] The National Coal Board, created in 1947, tried to modernise the Welsh coal industry but the number of pits in South Wales shrank from 115 in 1953, producing almost 21 million tons, to 34 in 1981, producing 7.7 million tons.[14] Pembrokeshire and Swansea Bay became centres of the petrochemical industry and new light industry was attracted to locations throughout Wales.[14] Wales attracted an above average share of the foreign direct investment (FDI) into the UK from the 1970s onwards but many of the new plants established by foreign firms were essentially "branch factory" operations offering low-wage, low-skill employment opportunities.[15][16] In 1971 Sir Julian Hodge founded the Commercial Bank of Wales (later renamed Bank of Wales) but the company was later taken over by HBOS and the brand dropped in 2002.

British £1 coin (reverse), depicting the red dragon (Welsh: Draig Goch), produced at the Royal Mint

In the post-war decades there was a shift towards service sector employment, which accounted for 60% of jobs by the 1980s, many of them held by women.[14] The concentration of official agencies in Cardiff increased the amount of bureaucratic public sector employment: Government regional policy brought various national bodies to Wales: the Royal Mint moved to Llantrisant, Companies House to Cardiff and the Driver and Vehicle Licensing Centre to Swansea.[14] From the 1970s on, the steel industry contracted, with works at Ebbw Vale, Shotton and East Moors in Cardiff closing and layoffs elsewhere. The early 1980s recession had a bigger impact in Wales than in other parts of the UK: between 1979 and 1982, Wales lost 130,000 jobs[14] and the employment rate fell to 62%.[17] Recovery started later in Wales, and structural changes left a legacy of high unemployment amongst older men, especially in the Valleys.[17]

21st century[edit]

Video of Welsh Government COVID-19 press conference in which the Economy Minister Ken Skates, announces that HMRC refused to share their data with the Welsh Government.[18]

Wales lags well behind the financial city of London, but according to the World Bank, in 2019 Wales' GDP /capita was better than 127 other nations.[19] Over the long term, output and productivity growth in Wales has been broadly in line with the UK and the developed world as a whole. What has marked Wales out is a low activity rate compared to other parts of the UK.[20]

Indicators[edit]

Gross Value Added (GVA)[21]
Year £ million £ per head Index of £ per head (UK=100)
1989 19,445 6,810 85
1990 20,990 7,335 84
1991 21,724 7,561 83
1992 22,659 7,874 83
1993 23,697 8,218 83
1994 25,049 8,675 83
1995 26,388 9,135 84
1996 27,518 9,517 82
1997 28,672 9,904 80
1998 29,787 10,273 79
1999 30,736 10,596 77
2000 31,898 10,973 77
2001 33,525 11,520 77
2002 35,252 12,074 77
2003 37,262 12,712 76
2004 39,340 13,352 76
2005 40,711 13,784 76
2006 42,697 14,396 75
2007 44,263 14,853 74
2008 45,610 15,237 74
2018 65,089 20,815 70

Currency[edit]

The currency used in Wales is the Pound, represented by the symbol £. The Bank of England is the central bank, responsible for issuing currency, and retains responsibility for monetary policy and is the central bank of the UK. The Royal Mint, which issues the coinage circulated over the whole of the UK, has been based at a single site in Llantrisant, Rhondda Cynon Taf since 1980, having progressively transferred operations from their Tower Hill, London site from 1968.[22]

Cardiff: the main engine of growth[edit]

As the capital city of Wales, Cardiff is the main engine of growth in the Welsh economy and the significant service centre and economic driver for the wider south Wales economy.[23] The city and the adjoining Vale of Glamorgan contribute a high share of economic output in Wales.[24] Cardiff is a centre for white-collar professions.[25] The city relies principally on the retail, finance, media and tourism sectors and has been undergoing major regeneration since the late 20th century, particularly in Cardiff city centre and Cardiff Bay.

Sectors[edit]

Agriculture and forestry[edit]

Sheep at Ty'n-y-Cornel farm, near Tregaron in West Wales

In 2003, agriculture contributed £418 million to Welsh GVA, or 1.1% (including subsidies).[26] 1.6m hectares (around 77% of Wales' total land area) is used for agricultural production and an estimated 57,500 people are directly employed in the sector.[26] Farming is dominated by beef, sheep and the dairy sector, with the arable sector accounting for 10% of agricultural output.[26] Average farm size is 30–40 hectares, small by UK standards, and dominated by family-run enterprises.[26]

Forest and woodland makes up 14% of the land area of Wales and there are 4,000 jobs and in forest-based industries.[26]

The Welsh fishing industry is the smallest in the UK, with about 1,000 full-time and 400 part-time fishermen.[26] The minor role that the Welsh industry holds is largely due to its geographical isolation, weak distribution networks and the demise of the Wales distant-water fleet from the 1960s onwards.[26]

Manufacturing[edit]

A short video by the Welsh Government on some of the technology companies in Wales
Port Talbot Steelworks, one of the last remaining heavy industrial plants in south Wales

Wales has a diverse manufacturing sector.[27] Heavy industry, once a mainstay of the Welsh economy, has largely been in decline over the past century but is still very apparent. Metal ore refining is a long established industry in Wales. As of 2007, Corus had manufacturing facilities at Port Talbot, Llanwern, Newport, Trostre, Shotton, Ammanford, Pontardulais, Tafarnaubach and Caerphilly, although only the Port Talbot Steelworks remains as a major integrated steelmaking plant.[28] Nearly all the tinplate and much of the aluminium produced in the UK are made in Welsh plants.[27]

Aston Martin Lagonda Production & Technology Centre St Athan, Wales

Milford Haven now has only one remaining oil refinery:[29]

Wales is an important producer of automotive components: Ford has a major engine plant at Bridgend, and BorgWarner has a major components plant in Kenfig, South Wales. However amid a global cost-cutting drive and citing a lack of demand for its manufacturing capacity, Ford closed the plant on 25 September 2020 and production of the Dragon engine is moving to Poland.

TIMET has a plant in Waunarlwydd, Swansea, which is one of the world's major suppliers of titanium for jet engine blades and medical applications.[30]

During the 1980s and 1990s, a major growth sector in manufacturing was the electronics industry with over 130 North American and 35 Japanese companies establishing operations in Wales.[27] However, this is a characteristic of a "branch factory" economy where routine production is located in one region while higher skill activities are located in another.[23]

Major trading partners[edit]

Excluding intra UK trade, the European Union and the United States constitute the largest markets for Wales's exports. Recently, with the high rates of growth in many emerging economies of southeast Asia and the Middle East such as China, UAE and Singapore, there has been a drive towards marketing Welsh products and manufactured goods in these countries, with China and Qatar entering the top ten destinations for Welsh exports in 2013.[31]

Top 10 export destinations, 2017
Destination Value
 Germany Increase£3.21 billion
 France Increase£2.73 billion
 United States Increase£2.29 billion
 Ireland Increase£1.04 billion
 Netherlands Increase£0.69 billion
 UAE Increase£0.56 billion
 Spain Increase£0.47 billion
 Belgium Decrease£0.46 billion
 Canada Increase£0.36 billion
 Turkey Increase£0.35 billion
Source: Welsh exports: Fourth quarter 2015[32]

The total value of international exports from Wales in 2015 was estimated at £12.2 billion (2014: £13.4 billion). The top five exporting industries in 2013 were power generating machinery £4.0 billion (2013: £4.2 billion), petroleum, petroleum products & related materials £2.6 billion (2013: £3.8 billion), Iron & Steel £1.288 billion (2013: £1.3 billion), electric machinery £0.69 billion (2013: £0.7 billion), and professional and scientific services £0.346 billion (2013: £0.353 billion).[33]

Services[edit]

In recent years, the service sector in Wales has seen above average growth; however in 2005 its share of GVA was small compared with most other regions of the UK.[27] Wales does not have a favourable occupational structure, and a relatively high proportion of jobs are in public administration, health and education.[34] Compared to more prosperous parts of the UK, Wales lacks high value added service sector employment in sectors such as finance, business services and research and development.[35] This is partly due to a weaker agglomeration effect, due to the small size of towns and cities in Wales compared to some other UK regions and small countries.[23][20]

Tourism[edit]

With its mountainous landscape and numerous sandy beaches, Wales attracts significant tourism. In 2002, nearly 13 million trips of one night or more were made in Wales, generating expenditure of £1.8 billion. Of these trips, 11.9 million were made by UK residents and 0.9 million by overseas visitors.[27] Cardiff is the most popular destination for visitors to Wales, with 11.7 million visitors in 2006.[36]

In 2014, over 10 million domestic trips of one night or more were made in Wales, generating expenditure of £1.7 billion.[37]

Wales' top 10 tourist attractions (2017)[38]
Attraction No of Visitors
Wales Millennium Centre Decrease1,082,494
The LC Increase796,149
Snowdon Summit Visitor Centre Increase654,077
St Fagans National History Museum Increase553,090
National Museum Cardiff Increase539,550
Folly Farm Adventure Park and Zoo Decrease480,000
Pembrey Country Park Decrease470,000
Newborough National Nature Reserve Decrease449,771
Pontcysyllte Aqueduct 333,363
Cardiff Visitor Centre 322,671
Cardiff Castle Increase319,131
Source: Visits to Tourist Attractions in Wales 2017)[38]

During 2020, and well into 2021, the restrictions and lockdowns necessitated by the COVID-19 pandemic affected all sectors of the economy and "tourism and hospitality suffered notable losses from the pandemic" across the UK.[39] As of 6 April 2021, visitors from "red list" countries were still not allowed to enter unless they were UK residents. Restrictions will "likely be in place until the summer", one report predicted, with June being the most likely time for tourism from other countries to begin a rebound.[40] On 12 April 2021, many tourist facilities were still closed in Wales but non-essential travel between Wales and England was finally permitted. Wales also allowed non-essential retail stores to open.[41] 

The outdoor areas of restaurants and pubs would reopen on 26 April 2021. Gyms, leisure centres and fitness facilities were to stay closed until 4 May.[42]

Property[edit]

In November 2008, the average price of a house in Wales was £126,181, a fall of 11.7% since the previous year. The average house price in England and Wales as a whole was £161,883.[43] In August 2008, average house prices in Wales ranged from £109,000 in Blaenau Gwent to £238,000 in Monmouthshire.[44]

Infrastructure[edit]

Transport[edit]

Railway lines in Wales

Rail[edit]

Wales is one of the few countries in the world where you must travel through another country when traveling from the capital to the furtherst point of that country, with nearly all line going East to West, rather than north–south. Rail infrastructure is not devolved to Wales; Wales has 11% of the rail network of Wales and England and 5.3% of the population, however the income received from Westminster in 2019-20 was 1.6%.[45] In 2021 there were no electrified lines in Wales.

Many major English cities, however, have direct rail connections to Wales. The South Wales coast as far as Swansea is served by the South Wales Main Line which passes under the Severn Estuary through the Severn Tunnel; the West Wales Line connects it to the Pembrokeshire ferry ports. The main north–south railway line is the Welsh Marches Line between Newport and Shrewsbury enabling direct services between Holyhead and Cardiff. An urban rail network, serving 81 stations, is focused on the capital, Cardiff. Mid and North Wales (away from the coast) are served by a limited number of branch lines, some of which connect with revived narrow gauge railways.

Roads[edit]

The M4 motorway, A449, A465, A48, A40, and A477 in the south, the A55 and A483 plus border links in the north, form part of the Trans-European Road Network.[46]

Ports[edit]

Wales has ten main commercial ports.[47] Milford Haven is the UK's largest energy port and is capable of delivering 30% of the UK gas demand.[48] Newport is the busiest UK port for iron and steel and Port Talbot is the third busiest for ores.[47]

Airports[edit]

Cardiff Airport is the only Welsh airport offering international scheduled flights. In 2007, Anglesey Airport became a public airport. The UK Government's Treasury has repeatedly refused Welsh Government calls to devolve Air Passenger Duty, as doing so would give Cardiff Airport an advantage over Bristol Airport.[49]

Telecommunications[edit]

On 28 November 2006, a trial of a new telecommunications network technology was rolled out in the village of Wick in the Vale of Glamorgan. The new network BT 21CN, offers broadband data transfer speeds of up to 24Mbit/s.

Energy and utilities[edit]

The Dinorwig Power Station largest pumped storage power station in Europe[50]

In 2019 Wales was the world's 5th largest exporter of electricity on the planet (22.7 TWh), placed above Norway; Canada was 1st with 64 TWh, then Germany 51 TWh, Paraguay 48 TWh and France at 42TWh. In 2019 Welsh electricity exports at market value were worth a potential revenues of £890million.[51][9]

In 2018, the annual production of electricity in Wales was 30.2 TWh and consumed 14.9 TWh, which means that Wales generates twice as much electricity as it consumes and is a net exporter of electricity to England, Ireland and Europe.[52][53] In the same year, 25% was from renewable sources, up from 22% in 2017. Electricity generation encompasses a broad mix of technologies including Coal (e.g. Aberthaw), Gas (e.g. Baglan Bay), Wind (Cefn Croes), hydro-electricity (Dinorwig), solar thermal/PV and biomass electricity.

In 2017, the Welsh Government announced a target of meeting 70% of Wales’ electricity demand from Welsh renewable electricity sources by 2030. By 2018, Wales generated over 3,864 MW renewable energy from 68,728 projects.[52]

In June 2018 the Welsh Government backed the Tidal Lagoon Swansea Bay project with an offer to invest £200 million; the project would see the world's largest tidal hydro-electricity plant. However, in June 2018, the UK Government refused to back the plan.[54][55][56]

In 2021, the Welsh government said that more than half the country's energy needs were being met by renewable sources, 2 percent of which was from 363 hydropower projects.[57]

Government spending and economic management[edit]

Taxation and public spending[edit]

The Welsh Government established Independent Commission on Funding and Finance for Wales (the Holtham Commission) which looked at funding devolved public services in Wales, and possible alternative mechanisms. In 2011, the Commission on Devolution in Wales (the Silk Commission) was set up to review the case for the devolution of fiscal powers.[58] This led to the Wales Act 2014, which devolved a range of provisions to the National Assembly, including powers over taxation. Fiscal and economic policy are currently reserved matters determined at Westminster, however from 2018 increased tax and borrowing powers devolved. In April 2018 the Welsh Government became responsible for three taxes: stamp duty land tax (SDLT), landfill tax and income tax.[59][60] This was the first time for Wales to raise its own taxes since 1283.[61]

Economic development[edit]

According to the Welsh Government's economic development strategy, the role of the public sector in the economy is to help create a stable and favourable business environment, promote skills and innovation (through for example apprenticeships and Design Wales), address market failures and invest in economic infrastructure including transport and information technology.[23] Aside from fiscal policy, energy policy, employment law, social security and various other aspects of market regulation are reserved to the UK Government.

Public sector employment[edit]

The public sector is also an important employer in Wales. In the year ending 30 June 2008, 386,000 people (28.8% of the Welsh workforce) were employed in the public sector, with the highest number (49,000) in Cardiff and the highest percentage of the local workforce (35.4%) in Swansea.[62]

Controversies in economic policy[edit]

The decline in Welsh GDP per person (relative to the UK average) over recent years has prompted policy debate. There have been suggestions – for example, by Plaid Cymru[63] – that Wales should attempt to emulate the Irish 'Celtic Tiger' model, particularly its low corporation tax rates, to stimulate investment and growth. However, economists such as Nicholas Crafts[35] and John Bradley[64] have argued that the low Irish corporation tax rate was only effective in the very specific demographic and historical circumstances of Ireland in the late 1980s and 1990s, and that such a policy in Wales' very different economic context would not only require political independence, but could be relatively ineffective and/or require difficult policy choices between higher personal taxes and lower public spending.

In a report for the Institute of Welsh Affairs in 2003, Phil Cooke of Cardiff University argued that the Welsh Government had responded to the loss of productivity in manufacturing by substituting new jobs in the public sector, making Wales increasingly dependent on fiscal transfers from Whitehall. Cooke suggested that a relatively weak devolution settlement had prevented the Welsh Government from developing innovative economic policies, especially when compared to Scotland.[65] However, critics including former Welsh Secretary Ron Davies[66] and John Lovering, another Cardiff academic, claimed that Cooke's argument that a more powerful Assembly was a necessary precondition to more effective economic policies was a non-sequitur.

Labour force[edit]

According to the Welsh Government bulletin of economic statistics for November 2010,[67] the Labour Force Survey estimates for the 3 months to September 2010 show that:

  • The employment rate in Wales was 67.1%, unchanged from the same period a year earlier. The UK average was 70.8%.
  • The ILO unemployment rate in Wales was 8.1% of the economically active, down from 8.8% in the same period a year earlier. The UK average was 7.7%.
  • The economic activity rate in Wales was 73.3%, down from 73.7% in the same period a year earlier. The UK average was 76.8%.
  • The claimant count rate in October 2010 for Wales was 5.0% of the workforce, down 0.7% in October 2009. The UK average was 4.5%.

For statistical purposes, the Office for National Statistics divides Wales into 26 Travel to Work Areas, collections of wards for which "of the resident economically active population, at least 75% actually work in the area, and also, that of everyone working in the area, at least 75% actually live in the area". Some of these areas span the border with England.[68]

Small and medium-sized enterprises made up over 99% of the 190,000 businesses in Wales in 2006,[69] but accounted for less than 60% of employment.[70]

Alongside official national statistics a number of respected private sector surveys are used to understand how the economy is performing. These include the British Chambers of Commerce Quarterly Economic Survey[71] This survey has information on the performance of Welsh businesses since 1989.

Economy by country and region[edit]

A map of the UK divided by the average GDP per capita in 2007 (in euros) showing the distribution of economic activity

According to Eurostat figures there are huge regional disparities in the UK with GDP per capita ranging from €15,000 in West Wales to €179,800 in Inner-London West. There are 26 areas in the UK where the GDP per person is under €20,000.[72]

These areas are the following:

  • 4.5 million (8.5% of English) live in these deprived English districts. 11 of these deprived regions in England: Durham, Northumberland, Greater Manchester North, Blackpool, Sefton, Wirral, Barnsley Doncaster Rotherham, South Nottinghamshire, Dudley, Outer London – East North East, Torbay
  • 1.4 million (45% of Welsh) live in these deprived Welsh districts. 6 of these deprived regions in Wales: Isle of Anglesey, Conwy & Denbighshire, South West Wales, Central Valleys, Gwent Valley, Powys
  • 1.1 million (20% of Scottish) live in these deprived Scottish districts. 5 of these deprived regions in Scotland: Clackmannshire & Fife, East & Mid Lothian, East & West Dumbartonshire, East & North Ayrshire, Caithness Sutherland & Ross,
  • 1.1 million (60% of Northern Irish) live in these deprived Northern Irish districts.3 of these in Northern Ireland: Outer Belfast, North of Northern Ireland, West & South of Northern Ireland.

Comparison with Ireland[edit]

In the 1950s Wales' GDP was twice as big as Ireland’s; by the 2020s the economy of the Irish Republic was 4 times the size of Wales.[9]

Regional variations[edit]

In recent years, Cardiff, the northern and southern coastal belts and some rural parts of Wales have experienced the biggest increase in employment, while the South Wales Valleys and other industrial towns have suffered a decline. This pattern probably reflects a combination of

  • the increasing importance of quality of life factors in location decisions;
  • the greater role played by the largest conurbations as centres of service sector businesses and
  • the effects of skill-biased technical change on the demand for labour, disadvantaging "skills poor" declining industrial districts.[73]

Average earnings and employment vary considerably across Wales. They are both generally higher in east Wales, especially in urban areas, but lower in south west Wales and the Valleys, although earnings in Bridgend and Neath Port Talbot, which are still centres of skilled manufacturing employment, are relatively high. In north and north west Wales, earnings are low but the employment rates are above the Welsh average.[23]

A significant part of the earnings (and value added per job) variations within Wales are due to structural factors such as economic mass and occupational mix rather than like-for-like lower pay or productivity.[23] Cardiff, with over 400,000 people, benefits from its size, capital status, a hinterland in south east Wales and good connections to London and the M4 corridor.[23] Cardiff is the primary location for service sector activities in Wales, with 26% of Welsh service sector output and 22% of Welsh service sector employment, compared to 19% of all employment in Wales.[74] North east Wales benefits from proximity to Cheshire, Greater Manchester and Merseyside and there is significant cross-border commuting. The Valleys and the western areas of Wales have less economic mass and are more distant from major economic centres. These are some of the poorest regions in Europe and qualify for Objective One funding.

Many parts of Wales suffered from a continuous decline in heavy industry over the 20th century, culminating in the virtual disappearance of coal-mining in the 1980s.[75] The demise of 'smokestack' industries left a legacy of high unemployment, and although unemployment has declined in recent years, unemployment in West Wales and the Valleys still tends to be higher than the Welsh average and economic inactivity (a form of hidden unemployment) continues to be a major problem in these areas. Merthyr Tydfil and Neath Port Talbot have some of the largest proportions of people in the UK not working due to long-term illness or disability, though some believe that in reality many people classified as "unable to work" through sickness are low-skilled workers encouraged to exit the labour market by the benefits system as well as declining demand for their skills.[23][76]

The figures below for 2013 come from Eurostat[77] and are denoted in Euros.

Regions (NUTS3) GDP € (2013) GDP per capita € (2013) GDP € (2016) GDP per capita € (2016)
Isle of Anglesey €1.167 bn €16,700 Increase €1.305 bn Increase €18,600
Gwynedd €2.956 bn €24,200 Increase €3.224 bn Increase €26,000
Conwy & Denbighshire €4.246 bn €20,200 Increase €4.767 bn Increase €22,600
South West Wales €7.678 bn €20,000 Increase €8.723 bn Increase €22,700
Central Valleys €5.939 bn €20,100 Increase€6.812 bn Increase €22,900
Gwent Valleys €5.962 bn €17,500 Increase €6.923 bn Increase €20,200
Bridgend & Neath Port Talbot €6.016 bn €21,500 Increase €7.240 bn Increase €25,400
Swansea €5.532 bn €23,100 Increase €6.332 bn Increase €25,800
Monmouthshire & Newport €6.322 bn €26,500 Increase €7.260 bn Increase €30,000
Cardiff & Vale of Glamorgan €14.361 bn €30,000 Increase €16.590 bn Increase €33,900
Flintshire & Wrexham €8.346 bn €28,800 Increase €9.374 bn Increase €32,200
Powys €2.869 bn €21,600 Increase €3.134 bn Increase €23,700
TOTAL 71.396 bn 23,200 81.683 bn 26,200

The GDP per head for Wales was €23,200, which was 84% of the EU average of €26,600, whereas for the UK as a whole this figure was 118%. The region of Wales with the highest GDP per head was Cardiff & Vale of Glamorgan with 114% of the EU average, and the region with the lowest GDP per head was Isle of Anglesey with 57% of the EU average.

See also[edit]

References[edit]

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  3. ^ GDP
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