Economy
The latest Treasury figures show the UK economy grew by 3.25% in 2004. This continues a long period of steady economic growth in the UK. This is in the context of an international economy affected by geopolitical uncertainty. The international economic climate continues to be uncertain, with rising oil prices, large current account imbalances and shifting exchange rates between Europe, Asia and the US.
Indicator EC1 - Percentage rise in GVA
Gross Value Added (GVA) is a key indicator of the state of the economy, and is broadly the same as Gross Domestic Product (GDP). GVA is the difference between the value of goods and services produced and the cost of raw materials and other inputs used up in production. Hertfordshire's GVA rose by 4.1% in 2004 (compared with 2.2% in 2003, an update on the figures shown in last year's report). This was above the UK rate of 3.3% and the East of England rate of 3.8%. Source: ONS and Cambridge Econometrics.
Indicator EC2 - Employment in knowledge-based industries and services
Knowledge-based industries and services are defined as 'finance, insurance, real estate and business services; education; health and social work; other community and personal services; post and telecommunications; high and medium-high tech industries: chemicals; machinery and equipment; transport, excluding building ships and boats'. The definition is set by the Organisation for Economic Co-operation and Development and used In the Department of Trade and Industry's UK Competitiveness Indicators.
Employment in knowledge based industries in Hertfordshire
Source: xxxxx - download and view this data in excel
For the purposes of regional comparisons the EU uses a narrower group of activities (essentially excluding services not considered high tech i.e. finance, insurance, real estate and business services; education; health and social work; other community and personal services). This is broken down into medium and high tech manufacturing and high tech services. There is an overall increase in employment in medium and high tech manufacturing and high tech services combined.
Employment in medium and high tech manufacturing & high tech services
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The EU Innovation Scoreboard 2003 (for 2002) when compared with the Annual Business Inquiry for that year can be used to compare Hertfordshire with regions within the EU. Hertfordshire had a greater proportion of employment in medium/high tech manufacturing together with high tech services than any of the UK regions save the South East and the West Midlands. Hertfordshire had a higher proportion of employment in high tech services than most EU regions (only Helsinki, Stockholm and Paris areas had higher rates).
Indicator EC3 - Mean annual earnings1
The mean annual earnings of Hertfordshire resident employees were £31,877. These are the highest in the East of England but are lower than those in London and Surrey.
Mean earnings
Source: Annual survey of hours and earnings (2005)- download and view this data in excel
Indicator EC4 - The percentage increase or decrease in the total number of VAT registered businesses
Although in most of the county there was a decline in the stock of VAT-registered businesses (graph below), there is reason to believe that this measure is not a reliable indicator of entrepreneurial activity. It is affected by de-registrations and the ODPM argues that 'churn' (businesses entering and leaving the market) is healthy. An alternative measure based on the number of new registrations is therefore given as well.
Change in number of VAT registered businesses
Source: xxxxx - download and view this data in excel
The second graph shows for each district/ borough in Hertfordshire the number of new VAT registrations in 2004 as a percentage of the number of registered businesses at the end of 2003. In 2004 Hertfordshire's districts had new VAT registrations equal to about 10% of their existing stock. Hertfordshire as a whole had new VAT registrations equal to 10.1% of its existing stock. This is in line with the pattern in recent years.
New VAT regsitrations as percentage of existing stock
Source: xxxxx - download and view this data in excel
1. The 'Annual Survey of Hours and Earnings' has replaced the previous 'income per household' data which is no longer purchased by Hertfordshire.