Transcript Changes & Renewal

Change and Renewal
Recession & Recovery in Birmingham & Solihull
The Churches’ Industrial Group Birmingham
Glynn Jones
Thursday 10th June 2010
Presentation
1. Economic context
2. The Birmingham and
Solihull economy
3. Economic futures
4. Key challenges
1
The nation has experienced a very deep recession,
especially affecting construction and manufacturing….
Source: ONS, UK Output, Income & Expenditure, February 2010
Notes: Q4 2009 GDP was revised up from +0.1% up to 0.4%; Q1 2010 up from 0.2% to 0.3%
Estimates of the recession have been revised downwards from 6% to 6.3%.
2
Which the West Midlands has been especially vulnerable
to
Seasonally Adjusted Unemployment Rate
(Q1 2007 - Q1 2010)
PMI Output (12-month average)
12
West Midlands
Yorkshire &
Humber
10
ILO Employment Rate (%)
East England
East Midlands
South East
North East
South West
North West
8
6
4
2
North East
North West
Yorkshire & Humber
East Midlands
West Midlands
England
London
40
45
50
55
60
0
2007 Q1 2007 Q3 2008 Q1 2008 Q3 2009 Q1 2009 Q3 2010 Q1
PMI (50 = no change on previous month)
Source: PMI West Midlands, Markit Economics / AWM, May 2010
ONS Labour Market Statistics, May 2010
3
However, it is clear that the regional economy has been
performing poorly over a much longer period......
Note: GDP and GVA data are NOT directly comparable
GDP = GVA + taxes on products - subsidies on products
Source: Office of National Statistics
4
With the West Midlands experiencing the lowest average
annual growth in GVA per head (2000-07) of any UK region
5
2. The Birmingham &
Solihull Economy
Birmingham and Solihull make up a quarter of the regional
economy
Contribution of Birmingham & Solihull to West Midlands GVA
Proportion of regional GVA attributable to
Birmingham & Solihull
27.0%
26.5%
26.0%
25.5%
25.0%
24.5%
24.0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Notes: Birmingham comprises 21% & Solihull 5% of regional GVA
7
But recent growth has been driven by the public sector,
whilst employment in the private sector has shrunk.....
Source: Work Foundation Analysis 2009
8
And the performance of (high-value) financial & business
services has been especially poor
9
Hence overall growth in GVA per head in Birmingham has
been lower than that for most other English core cities….
Change in GVA per capita across the Core Cities 1996-2006
90
% change in GVA per capita, 1996-2006
% change in GVA per capital 1996-2006
80
70
60
50
40
30
20
10
0
Nottingham Birmingham
Leeds
Manchester
Bristol
Sheffield
Liverpool
Newcastle
Source: Work Foundation Analysis, ONS 2009
10
And after very strong recent growth there are emerging
signs that Solihull’s growth is now ‘plateauxing’
GVA per head relative to UK average
West Midlands
Birmingham
Solihull
125
GVA per head relative to UK (100 = UK)
120
115
110
105
100
95
90
85
80
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
11
Birmingham especially has very high rates of worklessness,
in part reflecting its demography.....
Source: NOMIS, Annual Population Survey, May 2010
In this graph, ‘Unemployed’ are working age people who are without a job, but who are
actively seeking and able to start work. ‘Economically inactive’ are working age people who are
neither in employment nor unemployed
12
With very high worklessness rates for specific ethnic groups
Working age worklessness rate Birmingham Jan 2008-Dec 2008
worklessness as a percentage of population
90
80
70
60
50
40
30
20
10
0
All
Males
Females
White
All
Males
Indian
Females
All
Males
Females
Pakistani / Bangladeshi
All
Males
Females
Black British
Source: Annual Population Survey, 2009
13
Birmingham home to four of the top five highest claimant
proportions in England
Top four claimant proportions in
England: Ladywood, Hodge Hill,
Sparkbrook & Small Heath, Erdington
North Solihull has 4 SOAs in the top
1% most deprived nationally
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3. Economic Futures
Whilst conditions are improving, forward projections
suggest the recovery will be slow (and fragile)
Average of Medium-Term Independent Forecasts
3
Forecasts GDP Growth (%)
2.5
2
1.5
1
0.5
0
2010
2011
2012
2013
2014
16
Initial recovery may be ‘jobless’ with implications for those
groups most impacted by recession.....
Source: Labour Force Survey, 2009
17
There are longer term issues for the low skilled given the
continuous ‘shift’ to a knowledge-based economy
% of working age population with no qualifications
Working Age Population with No Qualifications
30
25
20
15
10
5
0
Source: Labour Force Survey, 2008
18
Also Birmingham has a very ‘young’ population – creating
significant demands for new jobs
Age structure of Birmingham compared to the UK - 2008
10
% of population in each age group
9
Birmingham
8
UK
7
6
5
4
3
2
1
0
Under 1
5-9
15 - 19
25 - 29
35 - 39
45 - 49
55 - 59
65 - 69
75 - 79
85 +
Source: NOMIS mid-year population estimates 2009
19
However, Birmingham is now vulnerable to public sector cuts,
affecting many ‘under-represented’ groups
Public Sector Employment
45
% of employment in Public Sector
40
35
30
Great Britain & West Midlands Average = 27%
25
20
15
10
5
0
20
This is reflected in the changes in redundancy notifications
Notified Redundancies (Jan-Mar 09)
Notified Redundancies (Dec - Feb 10)
29%
3%
56%
32%
6%
2%
4%
21%
manufacturing
services
construction
public
other
39%
8%
Source: Jobcentre Plus, Notified Redundancies, February 2010
Note: ‘Other’ includes Agriculture & Fishing and Energy & Water
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Malvern Hills
Staffordshire Moorlands
South Staffordshire
Wyre Forest
Bromsgrove
Tamworth
Cannock Chase
North Warwickshire
Nuneaton and Bedworth
Redditch
Rugby
Lichfield
Newcastle-under-Lyme
-20
Wychavon
Worcester
East Staffordshire
Stratford-on-Avon
Stafford
Herefordshire
Warwick
Telford and Wrekin
Stoke-on-Trent
Walsall
Dudley
Shropshire
10
Wolverhampton
Solihull
Sandwell
Coventry
Birmingham
Absolute change in thousands
Looking forward, whilst Solihull is forecast to see job growth
this is largely offset by decline in Birmingham
Absolute change in employment 2001-2010 and 2010-2020 by Local Authority
5
0
-5
-10
-15
Absolute change in employment 2001-2010
Absolute change in employment 2010-2020
-25
Source: Economic projections from SQW, The Economic Demand for Housing the West Midlands, 2000-2026
22
4. Key Challenges
4 key challenges facing Birmingham & Solihull
1. Achieving a rebalanced
economy ?
2. Creating sufficient jobs for :
•
those without qualifications
•
younger people
•
a rapidly growing workforce
3. Maintaining the momentum
on regeneration &
sustainable communities
4. Assisting communities and
individuals to adapt
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