Building for the future: housing-related sectors and the welsh economy

Abstract

Since the establishment of the Welsh Assembly Government there has been more emphasis on indigenous enterprises in relation to economic development policy. However, the housing-related sector has received little attention. This paper¹ presents the results of research that has investigated this sector and its significance to the local economy. Whilst acknowledging the considerable data-related difficulties in this exercise, analysis of housing and housing-related functions (including construction, finance, legal services, management of housing stock) showed that the sector accounted for around 4.5% of Welsh employment, and had considerable potential for assisting in the future development of the regional economy.

Keywords:

• Housing
• financial services
• economic development
• Welsh economy

Notes

The authors acknowledge support from the Council of Mortgage Lenders in this research.

Housing construction employment estimated using Housebuilders Federation estimates of employment engaged in housebuilding multiplied by ratio of housing output to housebuilding output in Construction Statistics. Additional estimate calculated using ratio of housing-related output to construction output from Construction Statistics against total employment in construction. Housing-finance related employment derived from consultation with CML, and analysis of Association of British Insurers (2002) statistics. Additional estimate of employment calculated using CML information, Input–Output tables for Wales, and New Earnings Survey data to estimate number of jobs supported by housing-finance generated income. Housing-related legal activities employment derived (as a proportion of total legal employment) from Monopolies and Mergers Commission (1997) report. Figures for housing-related government and registered social-housing administration derived from Welsh Local Financial Statistics and discussions with housing statisticians at the Welsh Assembly Government.

The Welsh Input–Output table is the product of an ongoing research project at Cardiff Business School. The latest table relates to the economy in 1996 (WERU, 2000), and this report is based on information provided in this table. Production of an updated (year 2000) table is currently underway with completion expected in early 2004.

The limitations of Input–Output tables for modelling the indirect effects of changes in sector activity are beyond the scope of this paper but are fully addressed in Bulmer-Thomas (1982).