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Reading’s exporting businesses underpin high wages

22nd January 2025

The annual health check for the UK’s city economies, Cities Outlook 2025 published by the Centre for Cities, ranks Reading as one of the strongest locations of the UK economy.

Workers in Reading earn in eight months what workers in Burnley earn in a year.

Reading businesses have delivered UK-leading productivity, underpinned by export-focused high-tech businesses who are paying the 4th highest average wages in the UK (£44,586) and creating an average disposable income of £25,736, the third highest in the UK.

A key focus for the 2025 report is the link between wages, productivity and the export base of a city. The report finds that the export base of a city is a key determinant of high wages with three key factors impacting on this performance and associated high wages:-

Export driven economic growth - Reading ranks 2nd to London for the size of its exporting base with an export value of goods and services per worker of over £140,000, making it one of the largest export bases for the size of its economy. Reading’s export value is three times higher than some northern cities, emphasising why Reading is a good location for global companies in technology, science and financial services sectors.

The number of cutting-edge tech businesses in a location - Reading has the 6^th highest new economy firms, (per 10,000 people of working age population), attracting a highly skilled workforce.

Adaptation away from manufacturing and into service sectors. Over the last 50 years, the growth in services away from manufacturing has been key to high wages and export success. The report says “specialisation in computer programming has served Reading well, helping to create a high-skill, high-wage economy.”

All of these three factors impact positively on wages. Reading is ranked 4^th for wages in the UK, which attracts more skilled workers to relocate here.

The report also asserts that city centres are vital as innovation hubs. Reading scores highly for the proportion of those businesses located in the city centre. City centres are, according to the report, vital in attracting knowledge-based businesses to relocate and grow. Reading excels in this regard and those businesses located in the centre play a disproportionately high role in driving the economy and in the future in growing wages.

Nigel Horton-Baker, Chief Executive of REDA, said: “The Cities Outlook 2025 report showcases the wealth of reasons why investment, innovation and talent beat a path to our city. The investment in central Reading and unmatched transport connectivity has helped underpin the historic tech strengths of the Reading economy but we are now seeing really encouraging signs of the economy further diversifying in areas such as film production and pharma. A diverse modern economy not reliant on one major sector or employer will sustain and grow Reading’s economy into the future, well beyond Reading’s 2050 Vision, and with the right local approach, bring benefits to all in the Greater Reading area.

“Reading’s skilled workforce is another reason why businesses relocate here. Just ten years ago, 42% of Reading residents were highly qualified. Since then the Reading population has grown by 12.6% and now, nearly 62% of Reading residents are qualified to RQF4 level or above. For every resident with no qualifications (just 2%), Reading has 27 residents who are highly qualified. Reading businesses attract talented people, who in turn encourage more businesses to locate here to grow the economy. Reading’s workforce feel the benefits of this in high wages, earning as much in eight months as other parts of the UK do in a full year.”

The Centre for Cities Cities Outlook 2025 also looks at 17 indicators across the 63 largest city areas in the UK including innovation, productivity, living standards, wages and skills. The Greater Reading area, which is defined as Reading and Wokingham boroughs, ranks as one of the leading UK economies across a wide range of criteria.

Factors in which Reading excels according to Cities Outlook 2025 (ranking out of 63 cities):-

3^rd for productivity – GVA per hour (Gross Value Added - the value of goods and services produced in a specific area, industry, or sector)
5^th for business stock per 10,000 population
9^th highest for private sector to public sector jobs
6^th for innovation – new economy firms (knowledge-intensive companies) per 10,000 population
3^rd for employment (and 10^th best for lowest unemployment benefits claimants)
4^th for high level qualifications – nearly 62% of Reading residents are qualified to RQF4 level or above which covers Higher National certificates to PhDs .
2^nd for working population with no formal qualifications
3^rd for disposable income per capita – average disposable income £25,736
8^th for housing stock growth
6^th highest population growth (+12.6% 2013-2023)