Transcript Will Rossiter - East Midlands Councils

East Midlands Economy: Are we all doomed?
or reasons to be cheerful…
Will Rossiter
Economic Strategy Research Bureau
EMC CPD Event, Melton Mowbray, October 2012
Overview
• The 2008 recession in historical perspective
• The impact of recession on the region
• A perfect storm – fiscal consolidation, the squeeze on real incomes
and the Eurozone crisis
• Regional ‘fundamentals’ and long term competitiveness
• Where might the jobs and growth come from?
Quarterly Economic Growth in the UK since 1955
7
1956Q1 - 56Q2
2 quarters;
0.31%
contraction
6
Quarterly % change
5
Average quarterly growth =
0.63%
Equivalent to annual growth of
2.54%
1975Q2 - 75Q3
2 quarters;
1.76% contraction
4
1990Q3 - 91Q3
5 quarters;
2.93%
contraction
3
2011Q4 - 12Q2
3 quarters;
1.03%
contraction
2
1
0
-1
Source: Based on data from Quarterly National Accounts, Table A2, (National Statistics)
2010 Q1
2005 Q1
2000 Q1
2008Q2 - 09Q2
5 quarters;
6.28%
contraction
1995 Q1
1990 Q1
1980 Q1
1975 Q1
1970 Q1
1960 Q1
1955 Q1
-3
1965 Q1
-2
1985 Q1
1980Q1 - 81Q1
5 quarters;
4.63%
contraction
1973Q3 - 74Q1
3 quarters;
3.25%
contraction
79
9.0
78
8.0
77
7.0
76
6.0
75
5.0
74
4.0
73
72
3.0
Employment D2N2
Employment Great Britain
Unemployment D2N2
Unemployment Great Britain
2.0
71
70
1.0
69
0.0
Source: ONS Crown Copyright, ‘Annual Population Survey’, rolling quarterly estimates, January 2006-December 2006 to
January 2010-December 2010.
4
Unemployment Rate (% Economically Active, 16-64)
Employment rate (% 16-64)
Employment and Unemployment
Unemployment
• Between September 2007 and September 2011:
– Nottingham went from 13th highest to 8th highest unemployment rate (out of
378 LADs/UAs);
– Mansfield went from 90th to 38th highest and Erewash from 148th to 72nd; and
– Unemployment in D2N2 LEP increased by 3.4 pp, the 7th highest increase out
of 39 LEPs.
• Oxford, South Buckinghamshire, Cambridge, etc. experienced little
increase in unemployment since the recession.
Source: ONS Crown Copyright, Model-Based Estimates of
Unemployment, from NOMIS, 3rd May, 2012
5
Real households' disposable income and actual
income per head (constant prices) 1997-2012
Source: The economic position of households, Q1 2012, ONS.
A perfect storm?
• Fiscal consolidation – taxes up, spending down…
• Squeeze on real incomes – taxes up and inflation up (although now
moderated)
• Employment insecurity – households paying down debt
• Eurozone crisis – uncertain prospects
• Result – depressed demand – both domestic and international
• No amount of supply side tinkering is likely to correct this
• Must focus on regional ‘fundamentals’
The East Midlands…
Reasons to be cheerful?
“The East Midlands is a region of opportunity. Confidence in its future
is founded on its generally diversified economic activity… its past and
present level of employment, and the relative absence of the
disadvantages associated with massive and congested conurbations.”
East Midlands Economic Planning Council 1969
Historic strengths/sources of competitive advantage?
Where can the jobs come from and what kinds of jobs will deliver the
best outcomes for local communities?
8
East Midlands Spatial Economy
9
Rebalancing? Manufacturing Employment
%
16
14
12
10
8
6
4
2
0
London
South East
East
South West North West North East
Yorkshire
and The
Humber
West
Midlands
East
Midlands
Source: ONS Crown Copyright, 2010 ‘Business Register and Employment Survey’. From NOMIS, 3rd May,
2012
Total
Other (Mainly Public) Services
Health
Education
Public Admin. & Defence
Other Financial & Business…
Business Services
Banking & Insurance
Communications
Transport
Hotels & Catering
Wholesaling
Retailing
Construction
Other Manufacturing
Rubber & Plastics
Paper, Printing & Publishing
Wood & Wood Products
Textiles & Clothing
Food, Drink & Tobacco
Transport Equipment
Electrical & Optical Equipment
Machinery & Equipment
Metals
Minerals
Chemicals
Fuel Refining
Gas, Electricity & Water
Other Mining
Oil & Gas Extraction
Agriculture, Forestry & Fishing
0.0
Productivity
(East Midlands
GVA per FTE,
UK=100)
Source: Experian Regional Planning Service, 2011
50.0
100.0
150.0
11
Manufacturing Employment
Source: ONS Crown Copyright, 2010. ‘Business Register and Employment
Survey’. From NOMIS, 3rd May, 2012
Contains Ordnance Survey data © Crown copyright and database right,
2012.
Rebalancing? Public Sector Employment
90
80
70
60
50
40
30
20
Private
10
Public
0
• Less affected (as a region as a whole), due to other regions having major
Source: BIS, ABI Employee Job Estimates, 2008
public sector concentrations (e.g. Sheffield)
• Public Sector Employment (PSE) fell from 20.1% to 19.2% of total
employment in the East Midlands between Q4 2010 and Q4 2011 – loss of
15,000 jobs over the period
Source: ONS Crown Copyright, 2012. Public Sector Employment, Quarter 4 2011. TSO:
London. accessed/published 14th March, 2012.
High growth businesses in Nottingham 2007-2010
Number of surviving firms
Number of surviving with 10+ employees
Number of high-growth firms
0
1000
2000
3000
4000
5000
6000
7000
8000
Source: NESTA 2011
14
9000
Further information
Will Rossiter
[email protected]
0115 8482875
Economic Strategy Research Bureau
http://www.ntu.ac.uk/nbs/business/specialist_centres/esrb.html
Includes links to recent reports on D2N2 and Nottingham City
emda archive
http://www.tinyurl.com/emdakb