Wales - Economy

Economy

Main article: Economy of Wales See also: Tourism in Wales

Over the last 250 years, Wales has been transformed first from a predominantly agricultural country to an industrial, and now a post-industrial economy. Since the Second World War, the service sector has come to account for the majority of jobs, a feature typifying most advanced economies. Total headline Gross Value Added (GVA) in Wales in 2010 was £45.5 billion, or £15,145 per head of population; 74.0 per cent of the average for the UK total, the lowest GVA per head in the UK. In the three months to July 2010, the employment rate for working-age adults in Wales was 67 per cent, compared to 70.7 per cent across the UK as a whole.

From the middle of the 19th century until the post-war era, the mining and export of coal was a dominant industry. At its peak of production in 1913, nearly 233,000 men and women were employed in the South Wales coalfield, mining 56 million tons of coal. Cardiff was once the largest coal-exporting port in the world and, for a few years before the First World War, handled a greater tonnage of cargo than either London or Liverpool. In the 1920s, over 40% of the male Welsh population worked in heavy industry. According to Professor Phil Williams, the Great Depression "devastated Wales", north and south, due to its "overwhelming dependence on coal and steel". From the mid 1970s, the Welsh economy faced massive restructuring with large numbers of jobs in traditional heavy industry disappearing and being replaced eventually by new ones in light industry and in services. In the late 1970s and early 1980s, Wales was successful in attracting an above average share of foreign direct investment in the UK. However, much of the new industry was essentially of a "branch factory" ("screwdriver factory") type where a manufacturing plant or call centre is located in Wales but the most highly-paid jobs in the company are retained elsewhere.

Due to poor-quality soil, much of Wales is unsuitable for crop-growing and livestock farming has traditionally been the focus of agriculture. The Welsh landscape (protected by three national parks) and 45 Blue Flag beaches, as well as the unique culture of Wales, attract large numbers of tourists, who play an especially vital role in the economy of rural areas. Wales has struggled to develop or attract high value-added employment in sectors such as finance and research and development, attributable in part to a comparative lack of 'economic mass' (i.e. population) – Wales lacks a large metropolitan centre. The lack of high value-added employment is reflected in lower economic output per head relative to other regions of the UK – in 2002 it stood at 90% of the EU25 average and around 80% of the UK average. In June 2008, Wales made history by becoming the first nation in the world to be awarded Fairtrade Status.

The pound sterling is the currency used in Wales. Numerous Welsh banks issued their own banknotes in the 19th century. The last bank to do so closed in 1908, since when, although banks in Scotland and Northern Ireland continue to have the right to issue banknotes in their own countries, the Bank of England has a monopoly on the issue of banknotes in Wales. The Commercial Bank of Wales, established in Cardiff by Sir Julian Hodge in 1971, was taken over by the Bank of Scotland in 1988 and absorbed into its parent company in 2002. The Royal Mint, who issue the coinage circulated through the whole of the UK, have been based at a single site in Llantrisant since 1980. Since decimalisation, in 1971, at least one of the coins in UK circulation has depicted a Welsh design, e.g. the 1995 and 2000 one Pound coin (above). However, Wales has not been represented on any coin minted from 2008.