Research Briefing
| Apr 23, 2024
UK : The everyday economy matters to local economic performance
The everyday economy generates half of all UK employment and 33% of GVA but is often dismissed because it generates less growth than high value services and has low productivity. But indirectly it has the capacity to improve the competitiveness and performance of local economies and has been identified by Labour Party leaders as a sector to focus on, if they win the election.
What you will learn:
- Discussions of how to improve local economic performance typically focus on manufacturing and high value services. But the rest, or the “everyday economy”, accounts for half of total UK employment, and in 291 out of 361 local authority districts it represents the largest share of employment—sometimes as much as two-thirds.
- Furthermore, in the decade to 2023, there were 153 local economies in which the everyday economy was the main driver of employment growth. Out of these 153, it was the main driver of GVA growth in 47, including 10 where it was the only part of the economy to experience an increase over the decade. In terms of employment there were seven LADs where the everyday economy sectors increased enough to offset decreases in high value service sectors and in manufacturing.
- But it cannot be denied that at the UK level, most of the employment and GVA growth over the 2013-23 decade was because of high value services, with a disproportionate weighting towards GVA. These accounted for 55% of employment growth and 79% of GVA growth.
- The everyday economy also has low productivity, with GVA per head of £36,900 compared with £72,000 and £76,000 for high value services and manufacturing, respectively. Ultimately, low productivity results in low wages.
- Overall, though, the everyday economy does matter, not just for the achievement of social goals but also as the foundation of the success of other sectors. If a local economy has a competitive everyday economy, it will improve the economic impact made by manufacturing and high value service sector businesses. The everyday economy plays an important role in driving local economic growth.
