Wales sees second-highest productivity growth in the UK

• Wales sees higher productivity growth than any other UK region or nation except NI - a 9.7% increase from 2011 to 2021 

• However, in 2021 its productivity per worker per hour still fell well below the national average, ahead of only the North East of England

• Improving Welsh productivity to UK sectoral medians would add £4.3bn to the nation’s economy 

In the decade 2011 to 2021, Wales’ productivity jumped by 9.7%; only Northern Ireland, with a growth rate of 13.5%, experienced quicker productivity growth in the same period, according to new analysis by PwC UK.

PwC’s Industrial Manufacturing and Services Productivity Tracker points to Cardiff’s rising productivity as a driver for Wales’ strong performance, focusing specifically on the presence of a City Deal, which gives local areas specific powers and freedoms to help them support economic growth, secure extra funding, create jobs or invest in local projects. The report also points to partnerships with Bristol, which are helping to develop a wider regional cluster of skills, investment and strategic collaboration. 

Wales’ productivity is buoyed by Cardiff’s strong industrial base, with a manufacturing GVA of £91,000 per worker, compared to a UK average of £78,000 - over £40 per hour. However, the output per hour per worker (£33) across the nation as a whole in 2021 is low by UK standards - in fact only the North of England had a lower figure.

The Welsh capital also performed strongly in PwC’s Good Growth for Cities report, issued in May, jumping ten places to 20th as a result of its strong performance on indicators such as work-life balance and income distribution, and skills, especially in younger people.

“Wales’ strong productivity growth demonstrates that it is possible to narrow regional productivity gaps - and as a result regional inequalities - over time. But it requires investment, and a group of local decision makers across all sectors of the economy to ensure it is used to unlock Wales’ unique economic characteristics.

The UK picture

• Northern Ireland has the highest productivity growth rate in the UK (increase in output per hour between 2011 and 2021). Northern Ireland's output per hour grew at 13.5% between 2011 and 2021, which was the fastest growth rate of any UK region. 

• Scotland is the UK’s most productive manufacturing region (output per hour).

• London remains the UK's most productive region overall. But strip out financial services and London’s lead over other regions narrows statistically.

• £71.6 billion boost to UK GDP if sectoral productivity in some regions is raised to at least the industry’s median levels.

Nick Atkin, Leader of Industrial Manufacturing and Services, said:

"Our Tracker underlines the close relationship between strong productivity growth, talent availability and high skills levels, and nowhere is this more evident than in the significant leap Northern Ireland has demonstrated.

"Despite historically low levels of productivity, our data shows that this region has had the largest hike, no doubt due to its relatively high share of sectors experiencing growth like construction.

"We know that boosting productivity can bring significant benefits. In fact by bringing production, services and construction productivity in under-performing regions up to at least the median sectoral levels, around £71.6 billion could be added to UK GDP.

“If Northern Ireland and Wales continue to prioritise investment and are successful in translating this funding into efficiency, they are likely to see their significant boost to growth manifest into long-term high productivity. 

"The good news is that with burgeoning shoots of strong productivity growth in places like Northern Ireland and Wales, it's clear that the right mix of innovation, regeneration and development can transform regional productivity, boost prospects and tackle inequalities."