Transcript Recovery to growth, Informing Hampshire, Apr 14

From recovery to growth?
An economic overview
Alan Cole
Hampshire County Council
Research & Intelligence
“To ensure a strong and visible evidence base for decision making in Hampshire”
How to predict the next global financial
crisis
Looking back, it was easy to see that
the crash was coming.
There had been too much cheap
money. Debt had exploded.
Speculation was rife. The gap
between rich and poor had widened.
Welfare spending had risen.
The financial system was so
stretched that even a modest
tightening of policy was enough to
make it impossible for over-borrowed
debtors to service their debts.
• The USA in 2007?
• Imperial Rome during the
reign of Tiberius in AD33
GDP, jobs and productivity
110
108
index (2007=100)
106
FORECAST
GDP
Employment
Productivity
104
102
100
98
96
94
92
2008
2010
2012
2014
2016
Source: ONS, OBR 2014
• GDP still below the 2007 peak
• Relatively strong growth in employment
• Productivity still lags behind but projected to recover
Labour market (April statistics)
•
•
•
•
Employment up
Unemployment down
Vacancies up
And average earnings
creeping ahead of CPI inflation
(but not RPI/housing costs)
• UK economic upswing heavily
dependent on households
• Consumer spending likely to
continue to sustain the upturn
• But recovery becoming better
balanced?
Source: EY ITEM Club
A better balanced recovery?
Contributions to GDP Growth
•
•
•
Source: EY ITEM Club
Boost in real wages
and jobs will sustain
consumer spending
But business
investment now also
kicking in – high
levels of corporate
cash and growing
confidence
More tentatively,
exports
strengthening as
overseas markets
recover
Hampshire economic change (GVA)
• Hampshire GVA data relatively volatile, but
generally follows national trend
• Tracks very slightly above UK average, in a very
smooth future(!), but 2.5% not 3.5%
Source: Experian
Hampshire economic change (Jobs)
• Hampshire employment data better quality, again
following national and regional trends
• Expected to track just above national average in
the forecasts, but under 1.0% not over 1.0%
Source: Experian
Productivity the key to growth
• Hampshire
productivity
improving over last
decade (recent dip)
• From just below UK
average to
approaching SE
• Just as important in
the future, locally as
well as nationally
32.0
30.0
28.0
Hampshire and Isle
of Wight
26.0
South East
24.0
United Kingdom
22.0
Source: ONS
£ output per hour worked
(current prices)
20.0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Four LEPs
• The future not like
the past (except for
Coast to Capital)
• Solent not yet
recovered from
recession, still
showing negative
growth
• Pecking order for
future growth
unchanged (except
for Coast to Capital)
Source: Experian
Diversity within Hampshire
Productivity factors – skills and earnings
NVQ4+
Average weekly earnings (f/t)
Diversity within Hampshire
Productivity factors – businesses
Business start-ups (per 10,000 adult pop)
Knowledge intensive businesses
(per 10,000 adult population)
Diversity
- sector
differences
18 : Arts, entertainment, recreation & other…
17 : Health (Q)
16 : Education (P)
15 : Public administration & defence (O)
14 : Business administration & support…
13 : Professional, scientific & technical (M)
Standard “Broad
Industrial
Sectors”
12 : Property (L)
11 : Financial & insurance (K)
10 : Information & communication (J)
SH/GB
9 : Accommodation & food services (I)
LEPs and others
have locally
defined key
sectors
Eg Marine,
Pharma/Bio
NH/GB
8 : Transport & storage (inc postal) (H)
7 : Retail (Part G)
6 : Wholesale (Part G)
5 : Motor trades (Part G)
4 : Construction (F)
3 : Manufacturing (C)
2 : Mining, quarrying & utilities (B,D and E)
1 : Agriculture, forestry & fishing (A)
Source: ONS
0
0.5
1
1.5
2
Local Authority differentials
UK Competitiveness Index 2013
• Central Hampshire LAs
in top 3 places
• Fareham similar to a
North Hampshire LAs
(and a major mover)
• Older urban areas of
South Hampshire in
bottom 5 places
• BUT Southampton 4th
highest city in UK for
Good Growth (PwC)
Source: Huggins and Thompson,
Cardiff University
Rank
2010
Rank Change
2013 in Rank
Winchester
29
26
3
Test Valley
53
35
18
East Hampshire
76
42
34
Hart
41
44
-3
Basingstoke and Deane
60
56
4
Fareham
174
75
99
Rushmoor
47
87
-40
175
117
58
85
142
-57
Portsmouth
205
158
47
Havant
206
167
39
Southampton
249
195
54
Gosport
281
375
-94
New Forest
Eastleigh
From recovery to growth?
• Recovery from financial crises is long and difficult
• National debt burden is still substantial
• But recovery becoming established and better balanced,
signs of business investment (exports less apparent)
• Productivity still lagging, but recent signs of improvement
• Hampshire economy growing, GVA and jobs, but
productivity wobbling
• North Hampshire – invest to sustain high performance
• South Hampshire – more challenging, but great potential
• Skills, businesses, key sectors
More information
• Hampshire Facts and Figures
http://www3.hants.gov.uk/planning/factsandfigures
• Particularly the Economy pages
• Hampshire (interim) Hub
http://protohub.net/
• Or e-mail
[email protected]
Any questions?
“To ensure a strong and visible evidence base for decision making in Hampshire”