As the South Wales Argus and NatWest join forces to push for Newport to become the City of Service, the bank has compiled a report looking at the regional economy - and it makes some interesting reading...

Newport is one of those places where the local people love to talk it down.

But an economic report compiled exclusively for the South Wales Argus by NatWest shows they should, in fact, be singing the praises of an area which is growing faster than the rest of Wales, and the UK average.

The economy of the region grew at an average annual rate of 2.2 per cent per year between 2014 and 2017, with growth accelerating to 2.4 per cent in 2017.

This is slightly faster than UK average economic growth of 2.1 per cent recorded over the past three years and ahead of growth of 1.9 per cent chalked-up across Wales over the same period.

The over all size of the local economy – the value of all economic activity taking place in the area – was a striking £10.8bn in 2017 (the latest figures available).

And the region, which covers the old Gwent area, accounts for almost one fifth of all the economic output generated in Wales (17 per cent of the national total).

--Service sector

The area is currently under-represented though in activities within the all-important service sector, which accounts for 68 per cent of value added in the region versus the UK average of 79 per cent.

The report shows that the hotel and restaurants sub-sector, for example, currently makes up 2.5 per cent of economic activity in and around Newport, directly contributing £270m to the local economy.

And it says that if the value of these activities was grown to be in line with the average contribution they make in the rest of Wales, it could potentially add a further £100m to the local economy.

The report's authors say: "This is not simply wishful thinking. The hotel and restaurants sector in the Newport region are already growing rapidly; expanding at a rate of seven per cent for each of the past three years, which is more than three times as fast as the whole economy has grown."



The region has an enterprising culture and the business environment is broadly favourable

The number of active businesses in the region has increased by almost one-quarter over the past five years (23 per cent) to 17,700 (as of 2017).

This is more rapid growth in private enterprises than in Wales as a whole (up 17 per cent in the past five years), though it pales into insignificance compared to the 71 per cent increase in businesses recorded in Cardiff over the period.

The number of businesses starting-up in the region leapt by 40 per cent, to more than 3,000, in 2017 – far outstripping the number of business closures (1,900).


The region is home to more than twice the share of manufacturing business as the UK, a sector which currently makes up 21 per cent of the local economy versus just 10 per cent for the UK as a whole.

The Newport region manufactures almost half (44 per cent) of all electronic, optical and electrical goods made in Wales. This sub-sector has grown at a lightening pace – a compound rate of 19 per cent over the past three years – and the area boasts five times the concentration of electrical manufacturing activities than the rest of the UK, making it a real hub of production.

Newport is also home to 30 per cent of all metal manufacturing and one-third of all food and drink processing activities in Wales.

But the region is also underweight in professional, scientific and technical activities and the IT and communication sector.

Currently, each of these sectors only contributes half as much to the local economy as they do nationally.

The report's authors said: "These sectors are increasingly important drivers of growth nationwide and it is critical that the region does not miss out on supporting and attracting such businesses to the area."

--Labour market

The local labour market is performing very strongly with strong jobs growth, but pay remains low compared to other areas.

In 2018 the employment rate in the region stood at 74.7 per cent, putting the local area on par with the UK’s record high of 75 per cent and above the rest of Wales (where only 73 per cent of the workforce have jobs).

A total of 12,000 jobs have been created in the local area over the past three years, raising the total number of people with jobs to 270,000 (in 2018).

The region boasts an unemployment rate of just 3.6 per cent (in 2018), down from four per cent in 2017 and from more than 10 per cent in 2011.

Unemployment in the region is now lower than the Wales average of 4.5 per cent and the UK average of 4.2 per cent.



Average weekly pay in the region increased by two per cent in cash terms, to £603, in 2018, meaning wages are almost exactly in line with the national average in Wales (£598).

Mirroring a trend seen right across the country, average pay in the Newport region remains three per cent below its 2008 level following a decade of weak earnings growth.

Earnings in the local area remain, on average, six per cent lower than in Cardiff and 12 per cent lower than the UK average.

This disparity in earnings may be partly explained by differences in workforce qualifications levels. Only 28 per cent of the working age population in the Newport region are qualified to degree level, which is below the UK average (35 per cent) and substantially lower than in the neighbouring city of Cardiff (51 per cent).


Despite declining in size in recent years, the public sector, including education and health services, remains the largest source of employment within the Newport region. Together these provide employment to 84,000 people or nearly one-third (31 per cent) of the entire local workforce (in 2018).

Retail activities, hotels and restaurants are the second biggest employer in the region – accounting for 49,000 jobs, or 18 per cent of the total workforce (in 2018) – and have created almost 5,000 additional jobs over the past five years.

Newport has seen an explosion in jobs in the banking, finance and insurance sectors over the past five years; with employment up by one-third – an addition of almost 10,000 jobs.

--What type of jobs are people doing?

As of 2018, 16 per cent of jobs in the Newport region are professional occupations – a proportion which has been relatively stable in recent years.

The local area has experienced sizeable growth in technical and associate professional jobs, which have increased by 7,000 over the past five years and now account for 13 per cent of all employment in the region.

Leisure, caring and other services occupations in the Newport region have also increased substantially in number, rising by 5,000 over the past five years to account for 10 per cent of the workforce in 2018.

In contrast, there are 6,000 fewer administrative and secretarial roles than just five years ago.


The region is home to a large number of people but projected slow population growth over the next decade presents a challenge to economic growth.

Newport is the third most populous city in Wales with a population of 151,000. Together with the surrounding areas, the region is home to more than half a million people (588,000), or one-fifth of the total Welsh population.

Over the next decade the population of the Newport region is projected to increase at a sluggish pace – growing by just 1.2 per cent or 7,200 people by 2029.

In comparison, the number of people in Wales is projected to grow by 2.6 per cent over the next decade and the population of Cardiff is set to increase by a whopping 9.9 per cent (36,700).

Slow population growth, which will be exacerbated by continued population ageing, is likely weigh on economic growth prospects in the local area [unless more is done to attract and retain more talented people to the region].

Chris Preston, managing director of NatWest Business Banking in Wales and the South West, who visited Newport last week to help launch the City of Service campaign, said: "When we talk about the Welsh economy, Cardiff is often referred to as the driver of economic growth and innovation yet Newport and the surrounding area of Gwent represent an equally impressive economic performance.

"The overall size of the local economy here is a striking £10.8bn. Even more impressively, economic growth in Newport and Gwent has recently outpaced the country as a whole.

"These are the building blocks that signal the city’s core strength and with it the opportunities for longer-term growth and prosperity.

"It is a city that has been built, in part, by entrepreneurs. Sir Terry Matthews’ vision and investments at the Celtic Manor Resort have made it a world renowned venue able to attract international events such as the 2010 Ryder Cup and NATO summit in 2014.

"We believe in entrepreneurs. That is why as the UK’s biggest supporter of business we are proud to be helping record numbers of businesses in Gwent achieve success - more than 5,000 to be precise.

"Service is a key way in which we help these businesses. It is only when you put the customer first that you are truly able to understand their needs and deliver a service that sets you apart from the rest."