In The Boardroom
The Western Mail published it's list of the Top 300 companies in Wales on Wednesday. Although the same faces tend to be in the list year after year it does highlight how strong the private sector in Wales really is. It can always be better of course and the Welsh and UK governments should be working tirelessly to improve our lot.
The top ten is dominated by frozen food retailer Iceland, Wales's largest company, closely followed by Cardiff-based insurer Admiral. Iceland has been subject to takeover rumours recently with ASDA and Morrisons reportedly interested but subsequently pulling out. Whether Iceland's £2.4billion turnover will be extracted from Welsh economic figures as a result remains to be seen.
GE Aircraft Engineering is now comfortably Wales's third £1billion company, while the likes of Celsa Steel, Calsonic Kansei, Dow Corning and Redrow highlight how important manufacturing still is to the Welsh economy and how little Wales relys on high-end financial services (with the exception of Admiral) – for better and for worse.
To break into the top 50 companies, the turnover needs to be pushing £100million per year and to get on the list it needs to be just over £18million. There is clearly a very strong base for growth and "small nation stars" – how can the Welsh Government help these companies take things to the next level? Should similar companies merge to provide resilience and compete on the international markets? Do we need to create more recognisable Welsh "brands" like Admiral, Gocompare and Iceland?
In addition, I've previously blogged on Wales's recent excellent export statistics – no doubt an important driver for growth in our manufacturing sector and reason for Wales to look closer to Europe where exporter nations, especially small adaptable ones, are king.
On the national balance sheet
First the good news. Welsh Gross Value Added (GVA) – the value of all services and goods produced in Wales over the last year – rose by 3.5% to £45.5billion (~$71billion) or £15,145 ($23,475) per capita. This means that Wales is very close to wiping out the economic "losses" incurred in the recession, being only slightly short of the pre-recession GVA (£45.6billion).
If we want to internationalise these figures, based on 2010 IMF figures, Wales's GVA per capita would rank at around 38th in the World – top table, "first world", but clearly with room for improvement.
This rise was faster than the rest of the UK and joint fastest with the East Midlands. However because of the distorting effect a major financial centre like London has, Welsh GVA remains at 74% of the UK average and actually fell relative to the rest of the UK. More depressingly, there was a huge difference between East Wales (91.4% of the UK average) and West Wales & The Valleys (62.8%).
Instead of an east-west split it could be seen as an increasingly rural-urban split in Wales, with the Valleys falling neither in rural or urban. East Wales actually outperforms many parts of the UK outside of London/South East, yet West Wales with it's lack of major urban conglomeration still suffers a negative "rural penalty" through no real fault of it's own. It's with some inevitability that rural areas have lower GVA's than urban ones. One of the main reason's Ireland's economy is stronger than Wales, in spite of it's rural nature, is that Dublin is a major global city and focal point for high-end economic development. It's a really tough problem to solve, but one way out would be to focus development on larger settlements in this area (like Aberystwyth, Carmarthen, Haverfordwest, Bangor) and continually improve transport links with east and south Wales.
On the ground
However good rises in GVA and the turnover of companies is to the national accounts, the impact of the figures above is ultimately meaningless to ordinary people on the front line.
What stands out on the Top 300 list is how many of the bigger companies have gained employees in the current year, the likes of Iceland and Admiral taking on as many as 1,000 new workers each. Further down the list however the picture is far more mixed. The private sector recovery isn't exactly in full swing in our larger and medium sized companies by the looks of it.
Economic inactivity rates in Wales, while remaining 2.2% higher than the UK average at 25.4%, are 0.9% lower than a year earlier and has consistently fallen over several years in spite of the recession. Good news? Certainly, but how long will this last?
The unemployment figures are a different story. After yet another unwelcome rise, unemployment now stands at 9.1% in Wales. However the rate at which unemployment is rising in Wales appears to be slowing, while the rest of the UK is "catching up", in particular Scotland, rising to an average of 8.3%. One possible explanation for the rise in unemployment may be the impact of school leavers in August at GCSE level as well as A-Level school leavers failing to get a place at university (for whatever reason), putting their career and education plans in limbo.
The Western Mail published it's list of the Top 300 companies in Wales on Wednesday. Although the same faces tend to be in the list year after year it does highlight how strong the private sector in Wales really is. It can always be better of course and the Welsh and UK governments should be working tirelessly to improve our lot.
The top ten is dominated by frozen food retailer Iceland, Wales's largest company, closely followed by Cardiff-based insurer Admiral. Iceland has been subject to takeover rumours recently with ASDA and Morrisons reportedly interested but subsequently pulling out. Whether Iceland's £2.4billion turnover will be extracted from Welsh economic figures as a result remains to be seen.
GE Aircraft Engineering is now comfortably Wales's third £1billion company, while the likes of Celsa Steel, Calsonic Kansei, Dow Corning and Redrow highlight how important manufacturing still is to the Welsh economy and how little Wales relys on high-end financial services (with the exception of Admiral) – for better and for worse.
To break into the top 50 companies, the turnover needs to be pushing £100million per year and to get on the list it needs to be just over £18million. There is clearly a very strong base for growth and "small nation stars" – how can the Welsh Government help these companies take things to the next level? Should similar companies merge to provide resilience and compete on the international markets? Do we need to create more recognisable Welsh "brands" like Admiral, Gocompare and Iceland?
In addition, I've previously blogged on Wales's recent excellent export statistics – no doubt an important driver for growth in our manufacturing sector and reason for Wales to look closer to Europe where exporter nations, especially small adaptable ones, are king.
On the national balance sheet
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| An environmental paradise but an economic desert. Does West Wales's sparsity drag the Welsh economy back? (Pic:Snowdon.com) |
If we want to internationalise these figures, based on 2010 IMF figures, Wales's GVA per capita would rank at around 38th in the World – top table, "first world", but clearly with room for improvement.
This rise was faster than the rest of the UK and joint fastest with the East Midlands. However because of the distorting effect a major financial centre like London has, Welsh GVA remains at 74% of the UK average and actually fell relative to the rest of the UK. More depressingly, there was a huge difference between East Wales (91.4% of the UK average) and West Wales & The Valleys (62.8%).
Instead of an east-west split it could be seen as an increasingly rural-urban split in Wales, with the Valleys falling neither in rural or urban. East Wales actually outperforms many parts of the UK outside of London/South East, yet West Wales with it's lack of major urban conglomeration still suffers a negative "rural penalty" through no real fault of it's own. It's with some inevitability that rural areas have lower GVA's than urban ones. One of the main reason's Ireland's economy is stronger than Wales, in spite of it's rural nature, is that Dublin is a major global city and focal point for high-end economic development. It's a really tough problem to solve, but one way out would be to focus development on larger settlements in this area (like Aberystwyth, Carmarthen, Haverfordwest, Bangor) and continually improve transport links with east and south Wales.
On the ground
However good rises in GVA and the turnover of companies is to the national accounts, the impact of the figures above is ultimately meaningless to ordinary people on the front line.
What stands out on the Top 300 list is how many of the bigger companies have gained employees in the current year, the likes of Iceland and Admiral taking on as many as 1,000 new workers each. Further down the list however the picture is far more mixed. The private sector recovery isn't exactly in full swing in our larger and medium sized companies by the looks of it.
Economic inactivity rates in Wales, while remaining 2.2% higher than the UK average at 25.4%, are 0.9% lower than a year earlier and has consistently fallen over several years in spite of the recession. Good news? Certainly, but how long will this last?
The unemployment figures are a different story. After yet another unwelcome rise, unemployment now stands at 9.1% in Wales. However the rate at which unemployment is rising in Wales appears to be slowing, while the rest of the UK is "catching up", in particular Scotland, rising to an average of 8.3%. One possible explanation for the rise in unemployment may be the impact of school leavers in August at GCSE level as well as A-Level school leavers failing to get a place at university (for whatever reason), putting their career and education plans in limbo.
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