Transcript Slide 1
The Humber Labour Market by the Regional Economic Intelligence Unit, Leeds City Council REIU (Regional Economic Intelligence Unit) Context This report was commissioned by the Humber LEP It aims to provide an up-to-date insights regarding the labour market. The report assesses the demand and supply side challenges facing the labour market using a range of indicators. REIU (Regional Economic Intelligence Unit) Global headlines.. □ China – the official Chinese PMI (Purchasing Managers Index) of Manufacturing showed a reading of 50.4 in November (down from 50.9 in October). This was the first fall in 4 months, prompting the Hang Seng Index to fall from its 10 month high. The 0.5 point fall was attributed to weak new export orders and slow pace of restocking activities. More recent industrial production and retail sales figures suggest that Chinese domestic consumption remains robust. □ Euro-zone – core economic data and the regions PMI still show signs of slow recovery for the Eurozone. Composite PMI hit a 3 month low at 51.5 in November (51.9 in October). There is still a great deal noise in Euro-zone leading indicators with October industrial production figures in Germany contrasting with leading indicators – the German government reported that industrial production fell by 1.2% in October. □ US economy – US GDP grew at 2.8% in Q3 with growth set top 3% in Q4 fuelled by string consumer spending into the final quarter. □ Japanese economy – October showed a strong recovery for the Japanese economy with both manufacturing and service sectors posting strong figures. Manufacturing PMI saw a rise to 54.2 (September 52.5) aided by the fastest growth in output in 46 months and a 4 year high in new orders. More recent official data saw downgrading in Q3 growth to 1.1% (from 1.9%) as the government revised down business investment and inventories contribution to GDP. □ Emerging markets - The emerging markets PMI signalled the strongest rise in output in seven months in October, rising to 51.7. Manufacturing and Services also registered stronger rates of expansion in October with six and seven month highs respectively. Russia and Brazil posted sharp increases in activity, but India again showed a decline for the fourth consecutive month. REIU (Regional Economic Intelligence Unit) Key global markets growth forecasts… Source: OECD WEO, November 2013 BES in US confirmed that US economy grew at 2.8% in Q3 2014 – OECD estimate is very accurate Reflection of US growth, the view going forward is that US growth will top 3% in Q4 2014 softening Into 2014 (as US consumer so pending slows). REIU (Regional Economic Intelligence Unit) Developed economies…..drivers of growth Source: OECD WEO, November 2013 OBR’s view of growth following Autumn statement more consistent with OECD Estimates, UK growth accelerates in 2014 and 2015. OECD has warned about overheating in UK property market given UK’s reliance on domestic consumption. Forecast 2013 2014 2015 OBR OECD 1.4% 1.4% 2.4% 2.4% 2.2% 2.5% REIU (Regional Economic Intelligence Unit) Global business confidence….. □ □ □ □ Global business confidence picked up slightly in October – Euro-zone concerns still weigh on sentiment in the emerging markets. German industrial production dropped unexpectedly in October (falling by 1.2%) – this may weigh on the global composite index as we enter November. Chinese contribution to overall global business activity levels remains strong with most analysts believing China will post growth of 7.8% in Q4 in part based on official data showing 10% growth in industrial production and 13% growth in retail sales (in November). Going into the year end US consumers remain in upbeat mood with Fed data pointing to significant increase in consumer credit to fund car purchases. REIU (Regional Economic Intelligence Unit) UK macro overview REIU (Regional Economic Intelligence Unit) Key headlines….. □ Labour Market Update – the ILO employment rate rose to 71.8% in the quarter to September (up 0.3% from the from the April-June quarter). The employment rate is now 0.4 percentage points (pp.) higher than the same time last year – the number of people now in employment was estimated at 29, 950,000 in quarter to September (up by 177,000 in the quarter). □ Unemployment – the headline ILO rate now stands stand at 7.6% having fallen 0.2pp from the previous quarter. The national claimant rate fell to 3.9% in October, falling by 0.1pp in the month and 0.8pp in the year (some 266,500 fewer claimants in the year). □ The Consumer Price Index – inflation in October fell to 2.2% compared to Septembers 2.7%, the lowest level since September 2012. The largest contributor to the reduction was the fall in transport costs which was the largest drop since July 2009. Fuel prices played the largest part of this decrease, with many supermarkets engaged in a fuel price war. □ GDP – ONS confirmed that the UK economy grew by 0.8% in in the third quarter, following the release of the 2nd estimate of GDP. The new data confirmed that all major parts of the economy contributed positively to GDP – encouragingly manufacturing output grew by 0.9% in Q3 outperforming the services sector which grew by 0.7%. REIU (Regional Economic Intelligence Unit) More headlines…… □ □ □ □ □ □ □ October saw the Bank of England MPC voting to holding UK interest rates at 0.5% whilst maintaining the existing quantitative easing programme set at £375bn. The BoE again reiterated its plan to hold the interest rate until unemployment reached 7%. However the forecasted date for this has now been revised from the end of 2016, to the end of 2014. Mortgage lending figures showed that in October there were a total of 42,808 loans approved by lenders, little changed on the September figures. Mortgage lending is still 33% higher than 12 months ago, due to a number of months showing strong growth in lending figures. The British Bankers Association suggests this could be due to increased caution by lenders after an initial rise in lending. ONS house price index dropped slightly in September to 184.9 from 186 (in August). With seasonal adjustment this equates to stagnation in national house prices between September and August. However ONS did report that house prices are currently at their highest level since record began in 1968. Public finances improved further in October as the recovering economy and housing market began to boost tax revenues. Net monthly borrowing fell in October to a figure of £8.08bn, down from a figure of £8.24bn a year ago. National debt rose to a total of £1.207tn putting the figure at 75.4% of national GDP. UK retail sales fell again in October by 0.7%, following a 0.7% fall in September. This was largely unexpected, with many forecasters expecting an unchanged level of sales. Retail sales are still 1.8% higher than a year ago. Clothing sales were down 2.8%, linked to mild weather conditions putting off many consumers updating the winter wardrobe. The retail sector represents 5% of the UK economy with consumers spending an average of £6.9bn a week. The UK total trade deficit was £2.6 billion in October (unchanged from the month prior) following - the deficit on trade in goods was £9.7 billion. The surplus on trade in services was estimated at £7.1 billion in the month. New industrial production data by ONS (for October) reported that both production and manufacturing output rose by 0.4% in the month, although mostly as result of domestic demand drivers. REIU (Regional Economic Intelligence Unit) Yorkshire and Humber overview….. REIU (Regional Economic Intelligence Unit) Yorkshire and Humber headlines….. □ □ □ □ □ □ □ □ □ The Yorkshire and Humber economy will grow by up 0.5% this year, with growth accelerating into 2014 (we estimate 2014 growth at up to 1.2%). Growth levels in Yorkshire trail the UK average and are somewhat lower in our forecasts than those in London, South East and the East of England (and lower than the North West). Employment growth softened this year compared to 2012, but will pick up in 2014 and 2015. The Yorkshire and Humber headline PMI index softened in November to 56.9 from the high point of 59.0 seen in October (down from September high point). The strong growth seen order books in September and October eased in November as the incoming new order index eased to 61.1 (although the rate of expansion still remains very robust – manufacturers reported the strongest growth in new orders). The headline ILO unemployment rate remained unchanged in the quarter to September at 9.1% (the rate was 0.1pp lower in the quarter). The rate has hovered in a narrow band throughout 2013 despite strong employment growth, in part reflecting the increase in labour market entrants in the year to September (some 43,000). The current headline employment rate in Yorkshire and Humber is estimated at 70.8%, having risen by 0.6pp in the quarter (and by 1pp in the year). Some 33,000 more people were in employment in the quarter and some 53,000 in the year to September. ONS Claimant Count showed that there was a further fall in October. Claimant rate fell from 5.3% in September to 5.2%. This shadowed a 0.1pp fall in UK claimant rate from 4.0% to 3.9% in the same period. The Y50 index shows that regions top public quoted businesses slightly underperformed the main bourses in the last three months, although with very strong performance from companies in North Yorkshire. REIU (Regional Economic Intelligence Unit) Yorkshire growth in a national context…. □ □ □ □ Wes estimate that Yorkshire and the Humber’s economy grew by grew by 0.35% in 2012. We are forecasting that regional economy will grow by between 0.3% to 0.5% in 2013. In 2013 we expect London and the South East to grow most rapidly – with London growing by between 1.2% to 1.5% and the South East growing by between 1.0% and 1.2%. Outside London and the South East the North West, the East of England and the East Midlands will post the highest rates of growth. REIU (Regional Economic Intelligence Unit) Regional employment growth… □ □ Yorkshire employment growth has fared better (compared to output growth) – with employment growing strongly in 2012 (around 2%), although softening appreciably into 2013 and 2014. The more robust employment compared to output clearly points falling productivity performance. REIU (Regional Economic Intelligence Unit) Key sectors driving regional growth □ □ The single largest part of the regional economy is the public sector (health, education and administration) which accounts for 23.6% of Yorkshires output, although going forward this share is set to fall to 22.9% by 2015. Key sectors likely to very well over next couple of years include professional and business services and wholesale and retail which increase their share of regional output (by 1%) whilst also growing in real terms by 5.1% and 5.6% (respectively). REIU (Regional Economic Intelligence Unit) Regional business sentiment….. □ □ □ The pace of overall activity softened significantly in November – falling to 56.9 in month (from 50.0 the month prior). The pace of regional output expansion still remains high by recent historical standards – although the transmission to employer hiring has lagged. Manufacturers have reported activity picked in November (due in the main to new domestic orders) whilst service companies reported activity eased slightly. Yorkshire’s strong growth in business activity softened slightly into November. Business sentiment is still very robust REIU (Regional Economic Intelligence Unit) Employer hiring sentiment…… □ □ The publication of the November Yorkshire and Humber PMI Employment suggests employment growth softened into November, with index falling to 51. The pace of growth remains below that nationally – at 54.3 in November. London and SE have seen very significant expansion in employer hiring in the past 2 months The pace of employer hiring remained unchanged in October following strong growth in September REIU (Regional Economic Intelligence Unit) Household income and costs… …that said overall cost of living increases will amongst the lowest in Yorkshire compared to other Regions (some 6.23% between 2013 and 2015) The gap between household spending and disposable income is set to narrow over the next couple of years – from £2.2 billion in 2011 to £456 million in 2015. Households will save less as overall income growth remains constrained REIU (Regional Economic Intelligence Unit) □ □ □ Y50 Index….. Yorkshire 50 experienced strong growth since August 2012, but in the past two months has suffered a 3pp fall. Major contributors of growth came from the 600 Group (19%), Proactis (16%) and the Redhall Group (14%). The greatest fall in stock price came from CCP Group falling -76%. NY10 continues strong growth, followed by the FTSE 250 and Y50 REIU (Regional Economic Intelligence Unit) The Y50 showed low level contraction this month Humber REIU (Regional Economic Intelligence Unit) Summary Economic data…… (1) 2003 2013 % % Change Change in UK Total Output (GVA) (£bn CVM 2010 prices) 14 15 4% 11% 415 430 4% 6% 539 568 5% 7% 888 933 5% 7% 12 12 3% 10% 11 12 9% 10% Workforce jobs (Thousands) Working age population (Thousands) Total population (Thousands) Household disposable Income (£bn CVM 2010 prices) Household spending (£bn CVM 2010 prices) Source: Regional Planning Service, Experian 2013 ▪ ▪ The Humber economy grew by 4% over the last decade. The number of jobs in the economy also grew by 4%. Both indicators underperformed the England average. Population, income and spending all grew strongly but could not match the national average. REIU (Regional Economic Intelligence Unit) Summary Economic data (forecast)… (2) 2012 Total Output (GVA) (£mn CVM 2009 prices) Workforce jobs (Thousands) Working age population (Thousands) Total population (Thousands) Household disposable Income (£mn CVM 2009 prices) Household spending (£mn CVM 2009 prices) 2022 % Change % Change in UK 15 17 17% 26% 430 443 3% 8% 568 596 5% 8% 934 975 4% 7% 12 14 16% 22% 12 14 19% 26% Source: Regional Planning Service, Experian 2013 Over the next decade, the local economy is forecast to grow relatively strongly but still lag the national average across all the key indicators shown in the table above. REIU (Regional Economic Intelligence Unit) Economic Activity in the Humber June 2013 Number 12 month change % Number % England % Economic Activity Economic activity rate - aged 16-64 451,500 77.1 0 0.2 0.8 Employment rate - aged 16-64 404,400 69.1 -1,400 0.0 0.9 47,100 10.4 1,500 0.3 -0.2 133,800 22.9 -2,000 -0.2 -0.8 28,800 21.5 1,500 1.4 0.4 105,100 78.5 -3,400 -1.4 -0.5 Unemployment rate - aged 16-64 Economic Inactivity % who are economically inactive - aged 16-64 % of economically inactive who want a job % of economically inactive who do not want a job Source: Annual population Survey, NOMIS, ONS The economic activity rate remained virtually unchanged in the Humber over the 12 month period to June 2013, compared to a 0.8% increase in England. The number of unemployed fell by 1,400 people but the rate remained unchanged in the Humber. Economic inactivity levels fell marginally in the LEP area. REIU (Regional Economic Intelligence Unit) Employment and Specialisation by Sector in the Humber Broad Sector Manufacturing Health Retail Education Business administration & support services Public administration & defence Transport & storage (inc postal) Accommodation & food services Construction Professional, scientific & technical Arts, entertainment, recreation & other services Wholesale Motor trades Information & communication Mining, quarrying & utilities Property Financial & insurance Agriculture, forestry & fishing* * These figures exclude farm agriculture (SIC subclass 01000). Employment LQ % share 56,500 55,100 38,900 33,800 1.9 1.2 1.1 1.0 16% 15% 11% 9% 24,600 23,100 21,700 20,100 19,500 15,900 0.8 1.4 1.3 0.8 1.2 0.6 7% 6% 6% 6% 5% 4% 13,500 13,000 7,200 6,000 4,500 3,600 3,600 900 0.8 0.9 1.1 0.4 1.1 0.5 0.3 0.2 4% 4% 2% 2% 1% 1% 1% 0% Source: BRES via NOMIS. Manufacturing, health and retail are the biggest employers in the Humber The area has key specialisms in manufacturing and is thus over-represented in that sector compared to the rest of England. REIU (Regional Economic Intelligence Unit) Employment and Specialisation by Sector in Humber According the Business Register and Employment (BRES) survey conducted by ONS, the manufacturing sector is the largest in the Humber in employment terms. It employs over 56,000 people, representing 16% of the workforce. Health, retail and education also remain very significant, employing 15%, 11% and 9% of the workforce respectively. The Location Quotient technique allows economists to show the extent of specialisation within a given sector or economy. A score higher than 1 denotes a higher degree of specialisation compared to the reference economy, in this case, the UK total. Using this technique it is clear that the Humber economy has strong specialisation in manufacturing, wholesale, motor trades but also in retail, education and construction, albeit to a lesser degree. In manufacturing, Humber has twice and national average of employment, given the size of its workforce. REIU (Regional Economic Intelligence Unit) Top 10 sectors in the Humber ranked by specialisation Employment Manufacture of coke and refined petroleum products LQ Fishing and aquaculture 1,500 300 11.2 6.2 Manufacture of basic metals 4,200 5.1 Manufacture of chemicals and chemical products 5,100 3.9 Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials 2,600 3.2 Manufacture of basic pharmaceutical products and pharmaceutical preparations 1,700 3.2 12,500 500 2.9 2.7 1,600 2,400 2.4 2.2 Manufacture of food products Water transport Manufacture of paper and paper products Manufacture of furniture Source: BRES via NOMIS. The Humber economy has 11 times the national employment in the manufacture of coke and refined petroleum products, relative to its economy. This points to incredibly high levels of specialisation within this sector. High levels of specialisation also exists in other manufacturing sub-sectors like basic metals, chemicals, wood, pharmaceuticals, food products and water transport. REIU (Regional Economic Intelligence Unit) Forecast change in population in the Humber, 2011-2021 300,000 250,000 200,000 0-10 150,000 11-20 over 60 100,000 50,000 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: ONS Sub-national Population Projections The 0-10 population in the Humber is projected to grow by 8% over the next decade. This is half the England growth rate. In absolute terms, the 0-10 year group is projected to grow by almost 9,000. The 11-20 year group is projected to shrink by 7%, equivalent to over 7,000 people. In England this year group is forecast to shrink by 3%. The over 60 group is projected to increase by 17% in the Humber, similar to the England average (18%). This is the equivalent of 38,000 people in the Humber. REIU (Regional Economic Intelligence Unit) Qualifications of the Economically Active (16-64) Population in the Humber (%), 2010-2012 35 30 28 28 29 25 20 18 18 19 20 18 19 2010 15 15 15 2011 13 10 2012 8 8 8 5 0 NVQ4+ NVQ3 only NVQ2 only NVQ1 only No qualifications Source: Annual Population survey, NOMIS, 2013 The proportion of the Humber population with NVQ4 or equivalent, rose slightly to 29% in 2012. This represents an increase of 5,300 people. In general, the proportion with no or NVQ1 qualifications has fallen, whilst those with NVQ2, NVQ3 and NVQ4+ has risen. REIU (Regional Economic Intelligence Unit) Comparing qualification levels in the Humber with and England, 2012 45 38 40 35 30 29 25 19 20 18 19 Humber England 17 13 15 12 10 8 6 5 0 NVQ4+ NVQ3 only NVQ2 only NVQ1 only No qualifications Source: ONS/NOMIS, 2013 Compared to England, the Humber has a much lower proportion of highly skilled residents. The sub region is over represented in terms of low skills and under represented with regards to high skills. The high skills gap with England has actually increased in recent years. In 2010 the gap was 7.6% but by 2012 this had risen to 9.2%. REIU (Regional Economic Intelligence Unit) Comparing NVQ4+ qualifications levels in the Humber with other Yorkshire LEP areas and England % of economically active with nvq4+ - aged 16-64 45 40 39 38 York, North Yorkshire and East Riding England 35 35 30 32 29 25 20 15 10 5 0 Humber Sheffield City Region Leeds City Region Source: ONS/NOMIS, 2013 It is clear from the graph above that the Humber has the lowest proportion of highly skilled residents when compared to the other Yorkshire LEPs. REIU (Regional Economic Intelligence Unit) Youth Unemployment in the Humber 40.0 34.8 35.0 30.0 28.3 25.0 23.0 20.8 21.2 20.0 18.3 Humber % England % 15.0 10.0 5.0 0.0 Total aged 16-24 males - aged 16-24 females - aged 16-24 Source: ONS/NOMIS, 2013 The youth unemployment rate in the Humber was 28% as at June 2013. This was much higher than the England average of 21%. More than one-third of male 16-24 year olds are unemployed in the Humber compared to 23% nationally. REIU (Regional Economic Intelligence Unit) 16-18 year old NEETs in the Humber (%) 12.0% 10.3% 10.0% 8.0% 7.0% 6.3% 5.7% 6.0% 3.9% 4.0% 2.0% 0.0% YORKS & THE HUMBER East Riding North Lincolnshire North East Lincolnshire Kingston upon Hull Source: The Department For Education, 2013 Despite recent falls, the NEET rate in Hull is still very high. By the end of 2012, it was 6.3%, 4 percentage points above the regional average. East riding on the other hand recorded, a NEET rate of only 3.9%, matching North Yorkshire as the lowest rate in Yorkshire. REIU (Regional Economic Intelligence Unit) 5+ A*-C grades including English & Mathematics GCSEs (%) 2005 East Riding of Yorkshire Kingston Upon Hull North East Lincolnshire North Lincolnshire England 2006 2007 2008 2009 2010 2011 2012 49.5 49.8 50.8 52.5 52.3 58.6 55.4 57.4 26.6 25.9 30 29.6 36.9 42.3 46.3 47.8 31.6 35.4 39 39.7 45.7 54.2 54.2 61.1 37.7 38.5 40.9 41.6 45.4 51.5 52.4 56.3 44.7 45.6 46.3 47.6 49.8 53.5 58.9 59.4 Source: Department for Education Of the four districts in the Humber LEP area, only NE Lincs achieved higher than national average results in 2012. Achievement in Hull is almost 12 percentage points below the England average even though the district has improved consistently over the last few years. REIU (Regional Economic Intelligence Unit) HE Enrolment in the Humber Subject area Mathematical sciences Mass communications & documentation Medicine & dentistry Engineering & technology Computer science Law Creative arts & design Historical & philosophical studies Physical sciences Languages Biological sciences Social studies Subjects allied to medicine Education Business & administrative studies Combined Total 2011/12 4 103 478 583 636 744 940 1,028 1,126 1,552 1,895 2,130 2,206 2,225 3,539 4,125 23,314 Source: HESA REIU (Regional Economic Intelligence Unit) 2010/11 10 113 460 577 664 815 974 964 1,053 1,365 1,906 2,079 2,199 2,311 3,550 4,282 23,321 Forecast Change in LCR Skills Profile, 2010-2020 QCF8 Doctorate 25.0 No Qualification 20.0 QCF7 Other higher degree 15.0 10.0 QCF1 GCSE(below grade C) & equivalent 5.0 1990 QCF6 First degree 2000 2010 0.0 2015 QCF2 GCSE(A-C) & equivalent QCF3 A level & equivalent QCF5 Foundation degree;Nursing;Teac hing 2020 QCF4 HE below degree level Source: UKCES Working Futures Series According to the Working Futures Series, published by the UK Commission for Employment and Skills, the Skills profile of the Humber will change significantly by 2020. The proportion of people with no or low skills is forecast to reduce whilst those with higher skills are forecast to increase. REIU (Regional Economic Intelligence Unit) Changing Occupation profile in the Humber, 2010-2020 Elementary occupations Process, plant and machine operatives Managers, directors and senior officials 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Professional occupations Associate professional and technical 1990 2000 2010 2015 2020 Sales and customer service Caring, leisure and other service Administrative and secretarial Skilled trades occupations Source: UKCES Working Futures Series The occupational profile is also projected to change significantly over the next decade. Higher skill occupation are forecast to grow at the expense of low skill roles. High contact occupations like sales and caring are also forecast to grow. REIU (Regional Economic Intelligence Unit) GVA by Sector, 2012 - 2016 Sector 2013 Real Estate Education 310 12% 1,062 1% Construction of Buildings 285 7% 4% Finance 258 1% 244 2% Retail 965 Wholesale 948 Administrative & Supportive Services Public Administration & Defence 2013 1,186 995 Food, Drink & Tobacco 20132017 % Change 5% Non-Metallic Products Health Land Transport, Storage & Post 20132017 % Change Sector 9% Agriculture, Forestry & Fishing 10% Other Manufacturing 231 9% 860 4% Recreation 194 10% 729 5% Other Private Services 176 -1% 713 10% Civil Engineering 171 30% 683 2% Machinery & Equipment 135 4% Utilities 539 5% Wood & Paper 133 0% Professional Services 487 105 8% Metal Products 473 9% Computing & Information Services 4% Telecoms 94 4% 460 9% Computer & Electronic Products 93 14% 75 2% 64 4% 37 8% 19 -37% 5 8% 3 2% Transport Equipment Fuel Refining 434 Specialised Construction Activities 395 Residential Care & Social Work 360 Pharmaceuticals 357 Accommodation & Food Services Chemicals -9% Media Activities 9% Printing and Recorded Media 2% Air & Water Transport 11% Textiles & Clothing 346 6% Insurance & Pensions 317 1% Extraction & Mining Source: Regional Planning Service, Experian 2014 In GVA terms Real estate, Education and Health are the largest sectors in the Humber economy. Only three of the 38 sectors are forecast to shrink over the medium term. REIU (Regional Economic Intelligence Unit) FTE Employment in the Humber, by Sector Sector Retail Land Transport, Storage & Post Education Health 20132017 % 2013 Change Sector 30,740 5% Other Private Services 27,430 2% Construction of Buildings 2013 20132017 % Change 4,040 2% 3,970 7% 26,980 0% Finance 3,390 6% 25,060 2% Real Estate 2,880 13% 2,850 15% 2,740 -6% 2,620 6% 2,260 -10% Administrative & Supportive Services 23,580 Wholesale 22,750 Public Administration & Defence 21,020 Residential Care & Social Work 18,730 Accommodation & Food Services 15,740 5% Machinery & Equipment 7% Agriculture, Forestry & Fishing 2,170 1% 14,990 3% Fuel Refining 1,840 -7% 13,510 2% Pharmaceuticals Professional Services Food, Drink & Tobacco Specialised Construction Activities Metal Products Transport Equipment 1,370 -3% 12,680 1,340 -1% 11,660 -3% Computer & Electronic Products 1,280 -4% 1,060 2% 6,540 Recreation Other Manufacturing Utilities Chemicals 6% Wood & Paper -10% Computing & Information Services 15% Printing and Recorded Media 6,580 Non-Metallic Products 10% Civil Engineering 1% Telecoms -5% Extraction & Mining 880 -7% 5,490 8% Media Activities 510 12% 4,840 2% Textiles & Clothing 450 -42% 4,260 4% Air & Water Transport 350 9% 4,070 -10% Insurance & Pensions 20 0% Source: Regional Planning Service, Experian 2013 In FTE employment terms, Retail, land transport, storage and post and health are the largest sectors in the Humber. 12 of the 38 sectors shown above are forecast to shrink significantly over the medium term. REIU (Regional Economic Intelligence Unit) Sectors Forecast to Expand in FTE terms, 20122016 Sector Administrative & Supportive Services Specialised Construction Activities Wholesale Retail Accommodation & Food Services Residential Care & Social Work Land Transport, Storage & Post Health Professional Services Recreation Civil Engineering Real Estate Food, Drink & Tobacco Construction of Buildings FTE Growth 2013-2017 Sector 2340 Finance 1940 Computing & Information Services 1410 Utilities 1410 Agriculture, Forestry & Fishing 1180 Other Manufacturing 850 Other Private Services 650 Education 610 Media Activities 480 Transport Equipment 460 Air & Water Transport 430 Telecoms 370 Non-Metallic Products 330 Chemicals 270 Public Administration & Defence FTE Growth 2013-2017 200 170 150 110 90 90 80 60 60 30 20 -350 -390 -2180 Source: Regional Planning Service, Experian In expansion demand terms, the Humber economy is forecast to create a net 9,700 FTE jobs by the end of 2017. Administrative & supportive services, specialised construction activities, wholesale and retail are forecast to create the most new jobs in the medium term. Public Administration & Defense, chemicals and non-metallic products are forecast to lose the most jobs over the period. REIU (Regional Economic Intelligence Unit) Total Demand for Labour in the Humber, 2010-2020 5,200 Expansion Demand Replacement Demand 167,806 Net Demand for Labour 173,006 Source: Working Futures, UKCES The total demand for labour in any economy is a function of both expansion demand (sectors/occupations actually growing and thus requiring a greater workforce) and replacement demand (the need to replace those in the current workforce due to retirements, relocation, incapacitation. Most analysis and literature focus on expansion demand but replacement demand creates many more opportunities as the table above shows. It is worth considering demand for labour alongside population growth. ONS population projections suggest that the Humber population is forecast to increase by just over 47,000 in the decade to 2021. this suggests that the Humber could struggle to met the total demand for labour from its own population unless the economically active population increases dramatically and more residents are brought into the labour market. REIU (Regional Economic Intelligence Unit) Replacement demand in the Humber, by Qualifications, 2010-2020 Base year level Change 2010 2010 2020 QCF group Projected level Total requirement Replacement Demand 2020 2010 - 2020 QCF 7-8 26,829 19,131 45,960 10,869 30,000 QCF 4-6 86,209 17,792 104,002 34,926 52,718 QCF 3 87,582 -8,023 79,559 35,482 27,459 QCF 2 92,209 6,132 98,341 37,357 43,489 QCF 1 77,856 -8,094 69,762 31,542 23,448 No Qualifications 43,514 -21,738 21,776 17,629 -4,109 414,200 5,200 419,400 167,806 173,006 Total Source: Working Futures, UKCES, 2012 Even though total employment is forecast to increase by about 5,200, the total requirement for labour is projected to be over 173,000. REIU (Regional Economic Intelligence Unit) Demand for labour in the Humber, 20102020 Caring personal service occupations Administrative occupations Corporate managers and directors Business and public service associate professionals Elementary administration and service occupations Teaching and educational professionals Sales occupations Transport and mobile machine drivers and operatives Business, media and public service professionals Other managers and proprietors Health professionals Skilled construction and building trades Science, research, engineering and technology… Skilled metal, electrical and electronic trades Skilled agricultural and related trades Customer service occupations Elementary trades and related occupations Leisure, travel and related personal service… Culture, media and sports occupations Secretarial and related occupations Science, engineering and technology associate… Health and social care associate professionals Process, plant and machine operatives Textiles, printing and other skilled trades Protective service occupations -10 -5 0 Net requirement Replacement demand Expansion demand 5 10 15 Source: Working Futures, UKCES, 2012 REIU (Regional Economic Intelligence Unit) 20 Occupation Structure in the Humber compared to England, 2010-2013 25 managers, directors and senior officials 20 20 19 professional occupations associate prof & tech occupations 15 15 15 14 administrative and secretarial occupations 12 10 10 9 11 10 11 10 skilled trades occupations 9 9 7 6 caring, leisure and other service occupations sales and customer service occupations 5 process, plant and machine operatives 0 2010 2013 Humber 2010 2013 elementary occupations England Source: ONS/NOMIS, 2013 The Humber is well represented in terms of the proportion of the workforce who are managers, directors and senior officials. However, the LEP area is significantly underrepresented in terms of professional occupations. The proportion of the workforce in elementary occupations has fallen from 14% to 12% over the last four years, closer to the England average (11%). REIU (Regional Economic Intelligence Unit) Conclusions…..(1) Over the last decade, the Humber economy lagged the national average in terms of GVA, job creation and population growth. The Humber economy has strong specialisation in manufacturing, health, retail and construction. In manufacturing, the sub-region has twice and national average of employment, given the size of its workforce. The percentage of the economically active in the Humber who are unemployed but want a job increased by 1.4% over the last 12 months compared to 0.4% in England as a whole. This is positive, provided enough jobs are created to satisfy this demand. The manufacturing sector is the largest employer in the Humber with 16% of the workforce. Financial services and insurance and professional, scientific and technical services are significantly underrepresented in the sub-region. The sub-sectors with the highest specialisation in the Humber are Manufacture of coke and refined petroleum products (with 11 times the national average employment), Fishing and aquaculture (6 times the national average), Manufacture of basic metals (5 times the national average) and Manufacture of chemicals and chemical products (with 4 times the national average). In the last few years, the proportion of the Humber population with high skills has risen whiles the proportion with low or no skills has fallen. This is positive news. However the rate of improvement lags the national average and that of other LEP areas in Yorkshire. REIU (Regional Economic Intelligence Unit) Conclusions…..(2) Projections from UKCES suggest that the proportion of low skills workers in the Humber will fall over the next decade whiles the proportion of high skilled people rises. The Humber economy is forecast to create a net 9,700 FTE jobs by the end of 2017, mainly from Administrative & supportive services, specialised construction activities, wholesale and retail. According to the Working Futures Series published by UKCES, the Humber economy will create 168,000 job opportunities in the period to 2020 due to replacement demand. This is vital for the Humber economy as it ensures that employment opportunities will be available as long as there are people with the requisite skills. However, given that the sub-region’s projected population growth rate is below average, it is possible that increased in-migration might be needed to fill these positions unless the economically active population increases dramatically over the next decade. By the end of 2012, the NEET rate in Hull was 10% compared to 4% in East Riding and 6% in Yorkshire and Humber a whole. Such relatively high NEET levels, have bedeviled Hull for many years although the recent economic downturn has exacerbated it. REIU (Regional Economic Intelligence Unit) Produced by The Regional Economic Intelligence Unit at Leeds City Council REIU (Regional Economic Intelligence Unit)