North-South Divide Has
Narrowed Over Past Five Years
9th October 2007
New research by Halifax shows that there has been a narrowing of the North-South divide on a number of key economic indicators over the past five years. Average earnings, employment and house prices have all increased more rapidly in the north:
- Average annual full-time earnings in the North have risen by 22% over the past five years, outpacing the 18% rise in the south.
- Employment in the north increased by 5.0%, almost double the 2.7% increase in the south and above the UK average of 4.0%.
- Unemployment– measured by the claimant count - in the north fell by 59,364 (-0.4%) over the past five years compared with a 28,510 (-0.2%) decline in the south over the period.
- The average house price in the north has risen by 97% over the past five years, almost double the 53% rise in the average house price in the south.
It has, however, not been all good news for the north with the south delivering faster GDP per head and productivity growth over this period:
- GDP per head in the south has risen by 29% since 2000, slightly higher than the 27% rise in the north.
- Productivity growth averaged 1.6%pa in the north over the past five years compared with 2.4%pa in the south over the period.
Whilst the gap has narrowed on some measures in the last few years, the North-South divide remains significant across nearly all the key economic indicators:
- Earnings in the south are 21% higher. Average annual full-time earnings in the south, at £31,020, in 2006 were 21% higher than in the north (£25,642).
- Unemployment is higher in the north. The claimant count unemployment rate remains higher in the north (2.6%) than in the south (1.9%).
- House prices remain significantly higher in the south. The average house price in the south in Q3 2007 was £265,921, 68% higher than the average house price in the north of £158,636.
- GDP per head is 31% higher in the South. GDP per head of £20,592 in the south in 2005 compared with £15,692 in the North – a difference of £4,900.
Tim Crawford, Group Economist at Halifax, said
"There have been encouraging signs that the North-South divide is closing with larger rises in earnings, employment and house prices in the north over the last five years.
The North-South divide, however, remains substantial on most key measures of economic activity with average earnings more than 20% higher in the south and house prices 68% higher."
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