Economic Climate
Key economic trends, 1991-2007
This graph shows the three key national economic indicators – Gross Domestic Product (GDP) growth, inflation and interest rates – from 1991-2007.
The recession of the 1990s was characterised by high inflation and high interest rates combined with a fall in GDP.
The current economic problems have occurred following a sustained period of low inflation and economic growth, highlighting the extraordinary nature of the global downturn triggered by the collapse of the banking and financial sectors.
In 2007, GDP growth stood at 3%, inflation at 4.3% (but beginning to rise) and interest rates at 5.5% – around half the level of interest rates in 1991.
Source: UK Housing Review, 2008: 76
Business survival rate, 2002-2006
This graph shows the percentage of VAT-registered businesses that have survived for at least a 12-month period between 2002 and 2006. They can be used as measure of the local economic climate and resilience of small businesses.
Between 2002 and 2006 there was a general improvement in the initial survival of businesses in all countries of the UK (3.6% increase), with Wales improving the most over the period (+5.1%) followed by England (+3.6%), Scotland (+2.7%) and Northern Ireland (+1.3%).
All countries reported survival rates of over 95% in 2006. However, differences each year show that survival rates are volatile and may be further affected by the recession.
Source: Regional Trends, 2009: Table 3.16
Labour productivity, 1997-2007
This graph highlights the relative labour productivity (the amount of goods and services produced by the workforce) in the four countries of the UK for 1997-2007. This is measured by the gross value added for every hour worked, against the benchmark index of the UK (100).
England is the only country that has consistently performed well and improved its relative productivity, while Wales has seen a steady decline in its productivity from 93.2 in 1997 to 85.6 in 2007.
Scotland's performance has been inconsistent, decreasing slowly in the late 1990s and improving during the early- to mid-2000s. By contrast, Northern Ireland experienced declining productivity until 2005, after which it slowly improved to reach levels similar to Wales in 2007.
Source: Regional Trends, 2009: Table 3.3