MER 2006 Summary

MER 2006 Summary

The Merseyside Economic Review 2006 is the annual healthcheck of the Merseyside economy. It tells all of us how our economy is doing, and points out the forces which are driving forward our growth, or which remain as challenges. The Review relies on official national data, allowing us to benchmark Merseyside against the North West, the UK, and other similar metropolitan city regions.


The Merseyside Economic Review 2006 is able to announce notable successes against many economic indicators. Our economic wealth grew again, by 5.9%, outstripping the growth shown by the UK, the
North West, and many of our comparators, so Merseyside has been able to continue the sustained closing of the wealth shortfall we have reported on in previous years. However, our wealth-per-head figure (GVA per capita) remains at around 73% of the UK average, leading to our first major policy imperative - to accelerate our rate of growth farfaster over the forthcoming years.


In the main, business and employment indicators have consolidated the growth reported in previous years and show small incremental improvements. No major indicators slipped back, but the increase in
the number of businesses, in levels of business density, and levels of employment in Merseyside, all showed relatively small rises. Unemployment figures are very recently creeping up again - although atless than 4% still much lower than many European counterparts. Business growth is the primary driving force of the Merseyside economy and these indicators drive our second major set of policy imperatives therefore: to accelerate the business birth rate particularly in high growth and high productivity sectors; to continue to attract inward investment; and to bring on-stream and properly utilise the premises and facilities that provide the best environment for those businesses to grow and remain in Merseyside.


The Merseyside Economic Review 2006 includes new analysis this year of the productivity challenge identified as a major constraint on our growth. Merseyside now employs relatively similar proportions of people in each business sector as the UK average, indicating that the significant dislocation and industrial adjustment which has been a feature of the Merseyside economy for decades is now lessening. But productivity, which is measured as GVA per employee, is always lower in Merseyside than it is in the UK, for each business sector - sometimes by up to 40%. Rather more work needs to be done this year on understanding the causes for this productivity shortfall - but remedying it over a sustained period of time is the primary way our first major policy imperative, to drive economic growth, can be achieved.


Skills are a crucial driver for these necessary productivity improvements. Sustained improvements continue on a number of skills indicators, such as the proportion of the adult population who have atleast a basic level of qualification, and those that are qualified to a higher level. Schools attainment is looking very strong and graduate retention also rose. Further alignment of the good work on basic skills
with the needs of the economy in the higher-skilled, high-productivity business sectors is our third major policy imperative.


A notable success has been recent data issued on population growth, where Merseyside looks to have broken a 30 year cycle of decline with a net increase in population driven by younger working-age people, a key indicator of economic vitality. Driven by student numbers and Liverpool city centre living, an increasing population makes significant contributions to our regeneration, our economic growth, and to the perceptions of Merseyside held by external investors and potential inward migrants.


There is enough evidence now to show a continued pattern of Merseyside, over time, growing to catch up with our comparator cities and the UK as a whole. The flow of investment from private, EU and Government sources is clearly making a difference and major infrastructure works such as the Mersey Gateway must be followed through. Future success will come through the combination of these
investment projects; our external perceptions management including the delivery of a fantastic 2008 Liverpool European Capital of Culture; and the effective co-ordination and dynamic leadership of the
continued painstaking work done by so many people across our sub-region.

You can read individual chapters of the summary document by clicking on the appropriate link below.