New economic vitality index shows that Wales weathered Covid storm best of UK countries

A ground-breaking new index which rates the economic vitality of every UK location shows that, in the 18 months from the start of the pandemic through to the current lifting of Government support measures, Wales proved to be the most resilient of the UK’s home countries.

Data from Evaluate|Locate – which rates every location across the UK on the basis of 96 economic metrics – shows that in the period from 1st March 2020 to 1st October of this year the economic vitality index (EVI) rating for Wales grew by +1.1%.

During the same period, England’s rating slipped by -1.3% followed by Scotland (-1.9%) and Northern Ireland (-3.8%). Across the whole of the UK, the economic vitality index was down by -1.5%.

Duncan Lamb of consultancy, JPES Partners – which has created the index – comments: “The economic vitality performance of the home countries during this period are relatively tightly grouped and, to a large extent, reflect how the Government’s fiscal and other measures have softened the economic blow of the pandemic.

“However, in the past month, the model is already showing an accelerated deterioration of economic vitality as those pandemic measures are withdrawn.

“When you drill down to the town-by-town, city-by-city detail, it becomes clear that lockdown had an uneven impact and this trend is becoming more accentuated.”

During the study period, analysis of all UK towns and cities shows that St Helens in Merseyside saw the highest index rise of 14.8% with its rating increasing from 94.2 to 108.1. This was largely fuelled by a rise in active new businesses; demand-led growth in house prices; and strengthening workforce statistics.

In stark contrast, the index for Greater London rose by only +0.3% from 223.6 to 224.4. This reflects the commercial hit that the capital has taken from the absence of tourists and also the loss of the economic activity normally generated by the millions of commuters who were absent from London during lockdown.

To a varying extent, the UK’s other major cities struggled with similar problems. Only Liverpool with an index uplift of +9% together with Birmingham (+7.4%) and Glasgow (+6.6%) showed index increases of substance. Elsewhere, there were modest uplifts for Edinburgh (+2.7%) and Bristol (+1.5%).

Newcastle remained virtually unchanged at +0.1% while Leeds fell by -2.0%. And while Wales as a whole led the home nations in terms of economic vitality during the first 18 months of the pandemic, the Welsh capital did not fare so well. Cardiff’s vitality score dropped by -8.4% as it also struggled with diminished commuter and visitor activity.

The Evaluate|Locate index took three years to build and brings together millions of data points from sources including ONS, Companies House, HMRC and the Land Registry into a model which continuously analyses economic vitality across 2,816 postcode-defined UK locations from January 2010 to the present day.

It is powered by metrics centred around business density; earnings; employment levels; average residential values; and population movements. Because it works from postcode granularity upwards, its analysis is entirely scalable.

JPES’s Adam Kirby – who led the team which built the model – comments: “Comparable and consistent tracking of precise locations which encompasses more than one metric is a difficult technical challenge. Previously, economic analysis of UK locations has been very fragmented and has often hinged on an inconsistent and vague interpretation of statistics for broad regions. These ultimately only reflected a moment in time and could be out of date as soon as they were published.

“Accordingly, there has often been frustration among both private equity and institutional investors with subjective ‘narrative’ locational analysis which does not align with a data-driven approach.

“Our index gives a more dynamic, constantly evolving picture of any UK location’s economic direction of travel and enables index-rated comparison of different towns, cities or regions.

“We believe Evaluate|Locate – and the economic vitality index it generates – have a valuable practical application for a large number of UK business sectors, and also to overseas entities who don’t have first-hand knowledge of this country.

“In terms of the UK economy, as the Build Back Better and Levelling Up initiatives progress, we’re also excited about the role that the model can play in enabling national and local government to track the effect of stimulus and policy on a location-by-location basis.”

Evaluate|Locate economic vitality index rating for selected UK locations

March 1st, 2020 – October 1st, 2021

Evaluate Vitality Index March 2020

Evaluate Vitality Index October 2021

EVI Change since March 2020 (%)

 

Wales

93.1

94.1

+1.1%

England

130.3

128.6

-1.3%

Scotland

104.3

102.4

-1.9%

Northern Ireland

95.5

91.8

-3.8%

 

United Kingdom

109.8

108.1

-1.5%

 

North West

106.7

107.9

+1.1%

West Midlands

108.8

109.9

+1.0%

East Midlands

105.1

105.4

+0.3%

Greater London

223.6

224.4

+0.3%

North East

86.7

82.5

-4.8%

South West

114.1

110.8

-2.9%

Yorkshire & Humber

99.9

97.0

-3.0%

South East

143.7

139.5

-2.9%

East of England

130.5

126.9

-2.8%