Transcript Document

Greater Manchester Forecasting
Model
4th December 2013
Professor Neil Gibson
Special Advisor: Oxford Economics
Agenda
The key facts
Changes since last release
The outlook
Assessing the risks
Policy considerations & summary
Our details & what is available
2
The key facts
3
Greater Manchester - A vital component of the UK economy
2013
2.7 Million People
Employment
1.3 Million Jobs
Gross Value Added
£49 billion GVA
Source: Oxford Economics
4
A service sector economy
Greater Manchester Population & employment breakdown - 2013
Looking after
family home
3%
Student
3%
Unemployed
3%
Sick
4%
Child
population
20%
Other
3%
Manufacturing
8%
Construction
6%
Wholesale &
retail
16%
Employed
49%
Other
20%
Elderly
population
15%
Source: Annual population survey, Oxford Economics
5
Public services
26%
Business
services
24%
Services generate over half the wealth
Sectoral breakdown of GM’s 2013 GVA
£49 Billion
Construction
0
Wholesale
& retail
Manufacturing
5000
10000
15000
Other
20000
25000
£m 2010
Source: Oxford Economics
6
Business services
Public services
30000
35000
40000
45000
50000
Manchester accounts for over a quarter of jobs
% of total GM Employment 2013
Source: Oxford Economics
7
… and GVA
% of total GM GVA 2013
Wigan
8.6%
Bolton
7.9%
Bury
Rochdale
5.9%
5.0%
Oldham
Salford
5.8%
10.1%
Manchester
Trafford
28.7%
Tameside
5.6%
11.6%
Stockport
10.7%
Source: Oxford Economics
8
Changes since last release
9
Forecast changes modest – new starting points
Population Greater Manchester
2900
1
2850
0.9
0.8
2800
2650
Last Release 0.4
0.3
2600
0.2
2550
0.1
2500
2000
■
10
Employment Greater Manchester
0
2005
2010
2015
2020
The total employment level in 2013 is
some 58,000 jobs higher than that
estimated in the last release, this figure
could be subject to a downward revision in
the future.
Current expectations are that BRES will
lead to a downward revision of 13,000
jobs.
The jobs forecast is very similar to last
year, albeit from a high base.
Source: ONS, Oxford Economics
(000s)
(000s)
2700
0.6
Current Release
0.5
■
As the chart shows there is little change to
the population forecast
0.7
2750
■
■
1440
1
1420
0.9
1400
0.8
1380
0.7
1360
0.6
1340
0.5
1320
1280
0.4
Current Release
0.3
Last Release
0.2
1260
0.1
1300
1240
2000
0
2005
2010
2015
2020
Changes since last release
GVA Greater Manchester
6%
4%
■
Our GVA growth outlook for the area is
marginally more positive than the previous
release.
■
GVA has been rebased to 2010 prices.
(£m 2010)
2%
0%
-2%
-4%
Current Release
Last Release
-6%
Unemployment Greater Manchester
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
-8%
■
■
The unemployment outlook is somewhat
more positive this year, with around 15,000
fewer claimants expected in 2023.
The latest data shows 2013 to have been
better than expected
Welfare effect more muted than
provisioned for, coupled with higher job
numbers and less population
Source: ONS, Claimant Count, Oxford Economics
11
(000s)
■
100
1
90
0.9
80
0.8
70
0.7
60
0.6
50
0.5
40
30
0.4
Current Release
Last Release 0.3
20
0.2
10
0.1
0
2000
0
2005
2010
2015
2020
Changes since last release
Summary of differences in 2013
2013
Bolton
Bury
Oldham
Rochdale
Stockport
Tameside
Trafford
Wigan
Manchester
Salford
Greater Manchester
Population (000s)
0.3
-0.2
-1.6
-1.4
-0.2
-0.5
-0.5
-1.6
1.1
0.3
-4.4
Employment (000s) GVA growth (pp change) Unemployment (000s)
0.8
-0.3
-0.8
4.2
-1.4
-0.4
3.1
0.7
-0.7
7.3
-1.6
-1.2
9.7
-1.2
-0.5
0.9
-0.2
-0.8
11.4
-2.1
-0.4
4.8
-1.0
-0.8
15.4
0.3
-2.0
0.4
0.8
-0.5
57.9
-0.5
-8.1
Source: ONS, Claimant Count, Oxford Economics
12
The outlook
13
What’s the story? – The Outlook
2013 – 2023 growth
135,000 More People
Employment
100,000 Net New Jobs
Gross Value Added
£17bn More annual GVA
Source: Oxford Economics
14
The regional picture - Above 3% growth projected
Per Annum GVA Growth 2013- 2023
Lower than Greater Manchester
Higher than Greater Manchester
Greater Manchester
3.02%
Scotland
2.63%
UK
3.34%
Northern Ireland
2.6%
North West
2.88%
East Midlands
2.87%
East
3.23%
Wales
2.49%
15
London
3.48%
South West
3.0%
South East
3.23%
Recovery for all, but city economies do still lead
2008-2013 pa % growth
Greater
Manchester
16
2013-2013 pa % growth
Greater
Manchester
Service strength leading the forecasts
UK more heavily
concentrated
Greater Manchester more heavily
concentrated
Agriculture
Information & comms
Arts & entertainment
Accommodation & food
Construction
Public admin & defence
Other service activities
Mining & quarrying
Manufacturing
Water supply & waste management
Real estate
Financial & insurance
Electricity, gas & steam
Human health & social work
Professional, scientific & technical
Education
Transportation & storage
Wholesale & retail
Admin & support
-1.5
-1
-0.5
0
0.5
pp. differnce (GM % - UK %)
Source: Oxford Economics
17
-200
+7800
+6200
+9800
+13200
-9200
5000
0
+11700
+500
+6400
+2300
-900
+1400
+26700
-4700
+8300
+13700
+27000
Jobs change 13-23
1
1.5
2
Key drivers: Sectoral
GVA growth 2013-2023 – Greater Manchester (£m 2010)
Wholesale & retail
Professional, scientific & technical
Financial & insurance
Information & comms
Admin & support
Manufacturing
Construction
Human health & social work
Transportation & storage
Accommodation & food
Education
Arts & entertainment
Electricity, gas & steam
Other service activities
Water supply & waste management
Public admin & defence
Agriculture
Mining & Quarrying
-500
Non Domestic
Domestic
0
500
1000
1500
2000
2500
£2010m
Source: Oxford Economics
18
Note: Excludes real estate as this includes ownership of dwellings and imputed
rents
The Outlook – key Local forecasts
Bolton
Bury
Oldham
Rochdale
Stockport
Tameside
Trafford
Wigan
Manchester
Salford
2013 - 2023 per annum change
Jobs (000s)
GVA (% per annum) Population (000s)
0.7
2.9%
1.2
0.5
2.9%
0.8
0.4
2.7%
0.9
0.4
2.7%
0.5
0.9
3.0%
1.0
0.2
2.5%
0.6
1.0
3.0%
1.0
0.5
2.6%
0.7
3.9
3.4%
4.8
1.5
3.4%
2.2
Source: ONS, Claimant Count, Oxford Economics
19
Sectoral focus – key business services
ICT, professional services, administration, accommodation & food and
arts employment (000s)
500
Forecast
450
78,000
Jobs
400
350
(000s)
300
Greater
Manchester
250
40,000
Jobs
200
150
100
50
Manchester
& Salford
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: Oxford Economics
20
■ Crucial ‘backbone’ of
jobs recovery
■ Growth has been
strong consistently in
cities
■ ICT has upside risk
Key Drivers: ICT and professional services
■ Classification can be an issue – but strong
growth in parts of the country
ICT employment (000s)
60
Forecast
■ ‘Big Data’ and computerisation of more
activities (law, consulting etc. could see reclassification into this sector)
Greater
Manchester
40
30
3600
Jobs
20
Manchester
& Salford
10
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Professional services employment (000s)
160
Forecast
140
■The primary source of job growth
■‘Catch-all’ sector for wide range of services –
suggest breaking down where you can in
policy circles
■Remember outsourcing from other sectors –
key to understand this sector
Source: Oxford Economics
21
26,700
Jobs
120
100
(000s)
(000s)
■ Expected to grow steadily
7800
Jobs
50
Greater
Manchester
80
14,600
Jobs
60
40
20
Manchester
& Salford
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Key Drivers: Admin and hotels sector
Admin & support employment (000s)
180
Forecast
160
26,900
Jobs
140
Greater
Manchester
100
■ Needs ‘broken down’ to fully understand the
local labour market – do you know what
your agency workers do?
80
13,800
Jobs
60
40
Manchester
& Salford
20
Accommodation & food employment (000s)
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
140
Forecast
16,100
Jobs
120
■ Key sector for both tourism and consumer
spending
■ Expected to recover in line with wider
economy, but could do even better?
Source: Oxford Economics
22
100
(000s)
(000s)
120
■ Fast growing sector and likely to rise even
faster as greater use of recruitment workers
and outsourcing of activities
80
Greater
Manchester
60
40
8,100
Jobs
20
Manchester
& Salford
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Key Drivers: Summary
ICT, professional services, administration, accommodation & food and
arts employment (000s)
ICT
Bolton
Bury
Oldham
Rochdale
Stockport
Tameside
Trafford
Wigan
Manchester
Salford
Greater Manchester
0.44
0.53
0.32
0.29
1.24
0.21
0.81
0.34
2.40
1.19
7.76
2013 - 2023 Employment Change (000s)
Professional Administrative
Arts &
services
services
entertainment
1.96
1.70
0.64
1.32
0.87
0.39
0.79
1.01
0.28
1.59
1.28
0.27
2.29
3.00
0.54
1.00
0.59
0.27
2.38
2.44
0.73
0.87
2.40
0.70
12.32
8.79
1.86
2.20
4.93
0.57
26.72
27.02
6.25
Suggests the area has a specialism in this sector
Source: Oxford Economics
23
Total
4.73
3.11
2.40
3.43
7.07
2.07
6.36
4.31
25.38
8.89
67.74
UK LQ <1.2
UK LQ >1.2
Key drivers: The contrast in industrial jobs and GVA
Employment – Thousands
GVA - £m 2010
250
8000
Forecast
Forecast
7500
200
(£m 2010)
100
6500
6000
50
5500
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
2002
2000
2022
2020
2018
2016
2014
2012
2010
2008
2006
2004
5000
2002
0
2000
(000s)
7000
150
12,000 Manufacturing job losses are forecast over the next decade, with per annum
GVA growth of 2.2% expected.
Source: Oxford Economics
24
A little more on manufacturing…
What Greater Manchester makes…
Top Manufacturing Sectors - Greater Manchester Employees
Manufacture of bread
5100
Manufacture of other furniture
3500
Machining
3500
Other printing
3000
Manufacture of made-up textile articles
3000
Manufacture of rusks and biscuits
2700
Manufacture of instruments
2600
Manufacture of other plastic products
2200
Manufacture of metal structures
2100
Manufacture of builders ware of plastic
2000
Manufacture of other food products n.e.c.
1900
Manufacture of prepared meals and dishes
1700
Manufacture of soap and detergents
1600
Manufacture of office and shop furniture
1600
Manufacture of paints & varnishes
1500
Manufacture of medical and dental instruments
1500
Other manufacturing n.e.c.
1400
Manufacture of corrugated paper
1400
Manufacture of grain mill products
1300
Manufacture of general-purpose machinery n.e.c.
1200
LQ > 1.2
Source: Business Register Employment Survey
25
GB LQ
1.72
2.09
0.94
0.76
3.35
2.64
1.13
1.23
1.01
1.29
1.56
1.70
4.20
2.05
2.32
0.87
1.14
1.32
3.04
1.17
Manufacture of bread
tops the list of
manufacturing sectors
within Greater
Manchester, with over 5%
of total manufacturing
employment coming from
this sector.
Local specialisms – broad sectors
Human health
Manufacturing
Wholesale & retail
Wholesale & retail
Manufacturing
Education
Transport & storage
Construction
Real estate
Education
Rochdale
Construction
Manufacturing
Bolton
Manufacturing
Bury
Oldham
Construction
Human health
Wigan
Salford
Tameside
Admin & support
Finance & insurance
Manufacturing
Trafford
Wholesale & retail
Stockport
Info & comms
Construction
Electricity, gas & steam
Admin & support
Finance & insurance
Electricity, gas & steam
Professional services
Professional services
Other service activities
Transport & storage
Admin & support
26 Note: Specialisms = Top 3 LQs with over 1000 employees
Local specialisms – more granular
Manufacture of bakery
products
Wireless telecommunications
Manufacture of weapons
Residential care
Wireless telecommunications
Manufacture of other
textiles
Weaving of textiles
Manufacture of other textiles
Weaving of textiles
Construction of
utility products
Rochdale
Manufacture of other
food products
Manufacture of jewellery
Manufacture of electronic
components
Bolton
Bury
Processing of fruit &
vegetables
Wigan
Television &
broadcasting activities
Manufacture of basic
chemicals
Oldham
Salford
Tameside
Preparation of textile
fibres
Trafford
Stockport
Other human resources
Repair of personal goods
Manufacture of games
Manufacture of lighting
equipment
Manufacture of grain mill
products
Manufacture of locomotives
Manufacture of refined petroleum
products
Other accommodation
Manufacture of gas
R&D on social sciences
Satellite telecommunications
Educational & support activities
Manufacture of irradiation equipment
27 Note: Specialisms = Top 3 LQs with over 100 employees
Who is coming?
Demographic changes 2013-2023
Bolton
Bury
Oldham
Rochdale
Stockport
Tameside
Trafford
Wigan
Manchester
Salford
Greater Manchester
Net Migration
-4.2
-1.6
-5.1
-8.3
-0.4
-5.2
-2.1
-4.9
9.0
6.5
-16.3
Source: Oxford Economics
28
2013 - 2023 change (000s)
Natural Increase Population (OE)
15.9
11.8
9.4
7.8
14.4
9.4
13.1
4.8
10.0
9.6
10.9
5.8
11.7
9.7
11.4
6.5
38.6
47.6
15.6
22.1
151.3
135.0
Population (ONS)
24.4
16.4
13.7
10.3
18.8
17.8
24.1
21.3
56.5
30.0
233.3
Changing demographics
Greater Manchester population forecasts
2000
1800
Total Population
(000s)
1600
1400
1200
1000
800
600
400
200
0
Source: ONS, Oxford Economics
29
Working age
population
Young population
Elderly population
Assessing the risks
30
Assessing the risks
Is the recovery secure?
Consumer risk?
Public sector risk?
Investment risk?
And the rest?
31
Consumer risk
Consumer industries employment change, Greater
Manchester, 1998 - 2023
13-23
08-13
98-08
Arts & Leisure
Accommodation & food
Wholesale & retail
-3
2
7
12
Source: Oxford Economics
32
-3
2
7
Jobs change (000s)
12
-3
2
7
12
Components of UK GDP growth
UK: Contributions to GDP growth
%pts
4
Consumer spending
Govt. consumption
Net trade
3
Investment
Inventories
2
1
0
-1
-2
19972007
2012
Source : Oxford Economics
33
2013
2014
2015
2016
2017
Inflationary pressures will be impacting
CPI Inflation, UK, 1998-2012
150
140
26% increase
since 2007
130
2005 = 100
120
30% increase
since 2007
110
Housing and
fuel
Food &
beverages
CPI (overall
index)
100
90
80
70
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
60
Source: ONS
34
Investment risk
 A ‘wall of investment’ has been projected to hit for a number of years, it has not come –
why not?
 Many forecast models suggest firms will not sit on money – so large corporate profits
must equal investment
 This has not proved the case – lack of demand is the likely reason
 Why ramp up production if you are unsure of domestic customer base and even
international base
 So investment more often follows, rather than leads, demand
 However possible to react quickly to signs of recovery – due to large corporate cash piles
and pent up housing demand
 So could be a ‘first mover’ if not the trigger
 But important to watch if this is ‘coming through’
35
Public sector risk – a seas change in local labour markets
Public services employment change, Greater Manchester, 1998 - 2023
13-23
08-13
98-08
Health & Social Work
Education
Public admin & defence
-10
0
10
20
30
40
-10
0
10
20
30
Jobs change (000s)
40
But will austerity be here to stay?
Source: Oxford Economics
36
-10
0
10
20
30
40
Being positive
 The weight of risks is still on the downside, but not all is gloomy
 The UK recovery has been broad based and gathering momentum
 Firms (large) have cash to invest and confidence is returning
 The momentum in recovery could be sufficient to mitigate against many of the risks, especially
consumer ones
 Rising inflation gives opportunities (product and service switching, new technologies etc.) and it will be
the battle ground of the next election – which may see some changes to curb prices (directly affecting
confidence and spend)
 UK reputation is enhancing – tax position, ease of business, macro environment, confidence in political
messaging (at least globally)
 Some of the changes (controversial!) have been delivering some welcome changes
 Private businesses have come out of the 5 years of pain stronger (those that have survived) – will the
same happen to public services?
 There are success everywhere, in all places, all sectors – perhaps we listen too much to the airtime
afforded to failure?
37
Policy considerations & Summary
38
Policy considerations
 Devolution of powers – landscape is changing
 Challenges are shifting (and growing) – global competition, demographics, skills, supply
chains
 Sectoral lines are blurring – what is manufacturing and what is services
 Outsources an recruitment agencies making it harder to gauge data
 Big data, better data – the correct evidence base is crucial (see BRES revisions, LFS
problems, ILO vs. claimant count, housing data)
 Scenarios – bigger range now than ever. What does success look like?
39
Summary
 The 2013 base positions is stronger than expected (though some revision will come for
sure)
 The forecasts are only modestly changed at headline level – though more subtle changes
within areas and sectors
 Greater Manchester Forecast is relatively strong, dominated by privates services (at least
in the labour market)
 The risks are still on the downside (increasing need for scenario)
 But maybe, just maybe, a rapid recovery is nearly upon us – capacity is certainly there
 Plan for success – prepare for the alternative!
 Big challenge for you to gather the data you need to correctly structure policy
40
Our details and what is available
41
GMFM 2013 – What is available
 Economy :
■ Employment;
■ Employees (note: excludes selfemployment);
■ GVA;
 Demographics:
 Employment by 25 minor occupation
groups;
 Qualification levels by occupation;
 Replacement demand by occupation;
 Household numbers;
■ Total population;
 Household income;
■ Broad age groups (young, working age
population and elderly);
 Carbon emissions, and
■ Migration – domestic & international;
 Demand for commercial floorspace
 Residence based
employment/employment rate;
 Unemployment level / rate;
 Note: economy results broken down by
broad sector, 50 SIC2007 sectors as well
as sectors defined by the New Economy
Contact details:
Oxford Economics
Lagan House
Sackville Street
Lisburn
County Down
BT27 4AB
UK
Tel: 028 9263 5403
Fax: 028 9263 5425
Kerry Houston
Head of Regional Forecasting
Oxford Economics
Email: [email protected]
Tel: 02892 635402
Anthony Light
Associate Director
Oxford Economics
Email: [email protected]
Tel: 0207 803 1419