Economy of Swansea

The economy of Swansea, South Wales concerns the area adminstered by the City and County of Swansea council.

History

1800s

Initially Swansea grew as a centre of the metallurgical industry in the 18th century. The Lower Swansea valley was a favourable for industrial development because of its port, easy access to coal deposits, and a supply of cheap labour. While lead and zinc were also smelted in west Glamorgan, Swansea’s signature industry was copper. Initially copper ore was imported from Cornwall, Cardiganshire and Ireland, but by the 1820s Swansea was receiving shipments from as far afield as South America, Africa and Australia. The copper industry reached a zenith in the 1880s, when the majority of copper ores imported to Britain were shipped to Swansea and local works employed around 3000 men at any given time.

From the 1870s, tinplate also became a major local industry, pioneered by the Siemens works at Landore. Tinplate production stimulated the further expansion of Swansea port with the opening of the Prince of Wales dock, to be used mainly for tinplate export, in 1882. The location of new tinplate works confirmed the steel industry’s increasing preference for coastal sites near ports. However, the Welsh tinplate industry was dependent on exporting to the American market, and suffered serious implications from the imposition of the McKinley tariff in 1890.

1900s

By the end of the Second World War these heavy industries were in decline, and over the post-war decades Swansea shared in the general trend towards a post-industrial, service sector economy. Today, the most important economic sectors in Swansea are: public administration, education and health (37.4% of local jobs); distribution, hotels and restaurants (25.5%); and banking, finance and insurance (16.3%). The high proportion of public sector employment is common to Wales as a whole (32.8%) and much higher than the UK average (26.4%). This primarily reflects the relative weakness of the private sector in Swansea rather than an "overly" large public sector. Much large scale private sector economic activity in the city consists of either manufacturing, call centres, other back office functions or outsourcing, evidence of a 'branch factory' economy where production and service delivery functions are located in a low cost region while head office functions are retained elsewhere - in the UK, usually London.

Today

Major Employers

Major employers in Swansea include manufacturing facilities operated by 3M UK plc, Alcoa, Alberto-Culver, Bemis, International Rectifier, Morganite Electrical Carbon, and Pure Wafer. Major service sector employers based locally include Admiral Insurance, Electronic Data Systems (EDS), NTL, BT Group, Conduit, Tesco and South West Wales Publications. Large public sector employers include the City and County of Swansea council, Driver and Vehicle Licensing Agency, HM Land Registry, Welsh Assembly Government, Department of Work and Pensions, Swansea University, Swansea Metropolitan University, and Swansea NHS Trust.

Employment

The largest single major category of jobs in Swansea is associate professional & technical occupations (comprising 13.7% of employment), although compared to the Welsh and UK averages the city also has relatively large shares of administrative & secretarial occupations (13.4%), elementary occupations (13.1%) and sales & customer service occupations (10.7%). There are proportionally more managers & senior officials in Swansea than Wales as a whole (13.3% compared to 12.5%), but this lags behind the overall UK figure (14.8%), reflecting the lack of any large regional corporate headquarters presence with the high value-added employment that brings.

In May 2006, 71.9% of Swansea's working age residents were in employment, 23.3% were economically inactive and 6.1% unemployed. The economic activity rate is higher than the Welsh average but notably lower than the overall UK figure. This differential may be partly due to the relatively large number of students in Swansea (the city has a university and an institute of higher education), but is also caused by a large element of 'hidden unemployment' especially in the more deprived areas such as Townhill and much of Swansea East. Only 8.1% of Swansea residents are self-employed, compared to an average of more than 12% in Wales and the UK as a whole.

Swansea has a higher proportion of working age population qualified to degree (NVQ level 4 or equivalent) level than the Welsh average, but a lower proportion than the UK average. Similarly, fewer Swansea residents have no qualifications (16%) relative to Wales as a whole, but the local figure is slightly higher than the UK average.

Commuting

The city is a centre of net in-commuting, with around 16,000 people making a daily journey outside the authority for work (principally to neighbouring Neath Port Talbot and Carmarthenshire) and 25,100 commuting in (again, mainly from Neath Port Talbot and Carmarthenshire).

Income

Surveys show that annual full-time gross median earnings for Swansea residents are lower than the Welsh and UK averages (£21,003 against £21,023 and £22,901). The annual gross median earnings for those who work in Swansea are even lower, only £19,391. Similarly, gross value added (GVA) per head is relatively low in Swansea at £13,507 compared to a UK figure of £16,485, although here Swansea performs better than Wales as a whole (£12,716). However, since the cost of living is lower in Swansea (indeed most of Wales) compared to many other parts of the UK, lower earnings and GVA per head do not necessarily signify a major gap in living standards.

City Centre

Although some surveys place Swansea as the 18th largest retail centre in the UK - a high placement considering the size of its population - in rankings of shopping attractiveness and competitiveness Swansea is usually placed outside the top 50, largely because of the low quality of the city centre retail offer.

A peculiarity of Swansea is the lack of employment in the city centre, relative to other towns and cities of similar size. Many major employers have moved to the Enterprise Park or other city fringe locations; only 4,510 office jobs are now are located in the city centre, compared to 13,910 in Cardiff. This reduces spend in the city centre economy and helps to underpin the weakness of the local retail sector. Low demand prevents speculative development of new commercial premises, which has created a vicious circle of city centre decline.

In January 2008, developers were appointed to lead the regeneration of several major sites in the city centre and the waterfront; proposals include 600,000 sq ft (56,000 m²) of additional retail space, 1,000 residential units and new leisure, office, hotel and conference facilities. The regeneration programme will take an estimated 15 years. The Welsh Development Agency (and now the Welsh Assembly Government) have been promoting the SA1 Swansea Waterfront development on the edge of the city centre, intended to become a "lively, attractive waterfront destination... using an imaginative mix of land uses". The WDA's Technium concept of incubator space for high technology firms (often spin outs from the local university) was launched at SA1, and additional facilities have now been constructed there and on the university campus. The Assembly and IBM are supporting a new Institute of Life Sciences at the university, which it is hoped will generate more highly-skilled, high value-added jobs.

Trend of regional gross value added of Swansea at current basic prices [1]. Figures in millions of British Pounds Sterling.

Year	Regional Gross Value AddedTemplate:Fn	AgricultureTemplate:Fn	IndustryTemplate:Fn	ServicesTemplate:Fn
1995	2,003	8	513	1,482
2000	3,146	8	628	2,510
2003	'3,578	8	595	2,975

External links

• Swansea 2020