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Chief Economist’s Blog – How strong is Devon’s economy?

This really depends on how you define strong.  There are a number of indicators where Devon performs well and a number of others where the county performs less well.

Unemployment for example is and has been for some time, lower than the national average.  This is a real strength, and when people do become unemployed they tend to find another job relatively quickly.  Over 86% of people who become unemployed find another job within 6 months (compared to less then 80% nationally) and only 3% are unemployed for more than 12 months (compared to almost 8% nationally).   As would be expected from strong employment performance the level of benefit claimant is also lower than the national average – just 11% of people in Devon claim some form of benefit compared to almost 15% nationally.

Devon is an enterprising county with a higher level of self employment than in the UK and this could be seen as strength. However it could also indicate a lack of any formal job opportunities which might be forcing people into self employment. It could possibly indicate Devon’s over-reliance on sectors such as agriculture and construction where self employment is the norm.

Add to this the lack of churn in the business sector. Only 6% of firms leave the VAT register each year, compared to 7% nationally, and only 7% are added to the register (compared to 10%) nationally.  This implies stability, but stability can be a weakness indicating a lack of competition and innovation.

Also on the flipside are the average wage levels in Devon which are below the national average. Gross weekly pay in Devon is just £400 compared to £489 for Great Britain, and the economy is also not very productive. GVA per employee is substantially lower than the national or regional averages.

But perhaps the best indication of how strong the economy is relates to how well it has coped with the global downturn and it is fair to say thatDevon has been hit relatively hard. In particular, the claimant count has increased faster than the national and regional averages. However employment markets are dynamic, there are always people losing their jobs and then finding new ones.  Over the last year over 24,000 people lost their jobs inDevon and claimed Job seekers allowance.  However at the same time over 20,000 stopped claiming Job Seekers allowance and found work. Whilst this does mean there has been a net increase in the total number of unemployed it is not all a downward movement.

So, it’s a mixed picture – some strengths and some weaknesses. However you can’t expect a firm conclusion from an economist….

View this article on the Chief Economist's website >