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North West Economic Profile The North West of England covers an area of 14,106 km² and is home to 6.9m people. It has the 3rd highest population of the Government Office Regions (GOR), behind London and the South East. The 6.9m people who live in the North West account for 13.4% of England’s population. The region also accounts for over 13% of employment in England and 11.2% of Gross Value Added (GVA), the Government’s method of calculating output in the economy. The North West’s share of England’s output is again only behind London and the South East. In excess of 255,000 businesses are based within the five sub regions of Cheshire, Cumbria, Greater Manchester, Greater Merseyside and Lancashire. OUTPUT: ‘In 2008 the North West economy grew by 3.6%, joint second highest rate of all English regions, whilst growth in GVA per head was the highest of all English regions’ In 2008 total GVA (Gross Value Added) in the North West was £120.7bn, up from £116.5bn in 2007 and £78,9bn in 1998. This ranked the North West the third largest economy after London and the South East. Between 2007 and 2008 North West GVA grew 3.6%, just above the England rate of 3.5% and down from 4.6% in the previous 12 months. The North West’s annual increase of 3.6% for total GVA between 2007 and 2008 was joint second highest (with the South West) of the English regions. London was the only English region to have a greater annual increase in total GVA over the period at 4.1%. GVA per head in the North West was £17,555 in 2008, up from £16,967 in 2007 and £11,617 in 1998. This was 83.5% of the England average and ranked the North West 6th, an increase of one place - among English regions. The annual increase in GVA per head was 3.5% was down from 4.4% in 2007 and above the England rate of 2.8%. The North West’s annual increase (2007-08) of 3.5% for GVA per head was the highest of the English regions. Table 1: Regional GVA 20081
North East North West Yorks & Humber East Midlands West Midlands East London South East South West England
Total GVA2 (£m) 40,916 120,702 89,122 79,977 94,494 111,555 265,063 181,750 97,840
Increase on 2007 (%) 3.2 3.6 3.3 3.2 3.0 3.3 4.1 3.0 3.6
GVA Per Head (£m) 15,887 17,555 17,096 18,041 17,463 19,473 34,786 21,688 18,782
Increase on 2007 (%) 2.8 3.5 2.5 2.4 2.5 2.0 3.2 2.1 3.0
Per Head Index (England = 100) 75.6 83.5 81.3 85.8 83.1 92.6 165.5 103.2 89.4
1,081,418
3.5
21,020
2.7
100
Source: Regional Accounts, ONS, December 2009 1 Estimates of workplace based GVA allocate incomes to the region in which commuters work. 2008 estimates are provisional 2 Components may not sum to totals as a result of rounding.
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
RIU EMPLOYMENT & BUSINESSES: ‘Manufacturing is stronger in the region than in England as a whole’ The North West is home to over 255,000 businesses of which 83.7% employ between 1 and 10 people. Just 0.7% of North West businesses employed over 200 people. A further breakdown of the number of companies by size and by broad sector is given in table 3 in the Appendix. Wholesale, retail & repair was the largest employment sector the North West, accounting for 16.9% of employment whilst real estate, renting and business activities was the largest employment sector in England at 18.8%. The North West is more heavily reliant on manufacturing for employment (11.6%) than England as a whole (10.2%) which may prove to be an advantage in any future rebalancing of the economy. Figure 1: Employees by Sector Northwest Employees by Sector 2008 Agriculture & Fishing Energy & 0% Other Services Water 0% Manufacturing 5% 12% Health & Social Work 13% Education 10% Public Admin 6%
Real Estate, Renting & Business 16%
Construction 5% Wholesale, Retail & Repair 16%
Hotels & Restaurants 7% Transport, Storage Financial Intermediation 4% & Comms 6%
England Employees by Sector 2008 A griculture & Fishing 0% Other Services 5%
Energy & Water 0%
Health & Social Work 12%
Construction 5%
Education 10%
Wholesale, Retail & Repair 17%
Public Admin 5%
Real Estate, Renting & Business 19%
Manufacturing 10%
Hotels & Restaurants 7%
Financial Intermediation 4%
Transport, Storage & Comms 6%
Source: Annual Business Inquiry 2008 – Employee Analysis, NOMIS
Using the Annual Population Survey, from January to December 2008, the number of people in work in the North West fell by 35,500 over a 12 month period, although the employment rate only fell by 1% to 71.3%. The comparative figure for England shows an overall increase in the number of people employed of 68,800, which represents an employment rate of 74.0% for 2008, 0.3% lower than the previous year. The reduction of the number of people employed in the North West (2007-2008) was the heaviest of all English regions, although the North East and London both had lower employment rates.
UNEMPLOYMENT: ‘Unemployment rose between 2007 and 2008 as a result of the economic downturn’ The International Labour Organisation (ILO) definition of unemployment is a count of jobless people who want to work, are available to work, and are actively seeking employment. This is used internationally, so comparisons between countries can be made, and it also allows for consistent comparisons over time. This is the method used to calculate unemployment in the Annual Population Survey. For the period January – December 2008, unemployment in the North West stood at 6.5%, the third highest of all English regions after London and the North East. Over a 12 month period the unemployment rate in the North West had increased by 0.7% due to the economic downturn, however the reader should not that the data is lagged. An alternative measure of unemployment is the claimant count which measures only those people who are claiming unemployment-related benefits (Jobseeker's Allowance). It is always the lower measure than the ILO definition because some unemployed people are not entitled to claim benefits, or choose not to do so however it is a more timely measure. The figures below relate to this method of calculating unemployment and show some stark increase between 2008 and 2009.
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
RIU The claimant count rate in the North West in December 2009 had risen to 4.6% of the working age population or 194,777 people. This was an absolute increase of 45,338 people or 30% (from 3.5% of the working age people). Over the 12 month period, the claimant count for those aged 18-24 in the North West claiming for over 6 months more than doubled from 5,308 to 12,740 whilst those within the same age group claiming for less than six months increase by just 11% from 43,145 to 48,020. People aged 25+ in the North West claiming for over 1 year rose by 95% from 12,910 to 25,185. EARNINGS: ‘Weekly full time earnings are lower in the North West than the national average, and men still earn more than women’’ Wage levels in the North West, expressed as median gross weekly pay for all employees are lower than the national average. Male rates of pay were 92% of the England average in 2009, whilst female rates represented 95%. The most recently published data from the Annual Survey of Hours & Earnings (ASHE) indicate that the gap between male and female wage rates in 2009 in the North West was £163.10 lower than the gap 12 months previously. Over the period 2008-09 average earnings in the North West grew by just 0.1% compared to 1.1% across England. Table 2: Median Gross Weekly Pay (£), for all Employee Jobs – Residence Based
Total England North West Male England North West Female England North West
2008
2009
% Change 2008-2009
396.1 371.2
402.8 373.8
1.7% 0.7%
493.1 460
498.3 460.3
1.1% 0.1%
301.2 291.3
312 297.2
3.6% 2.0%
Source: Annual Survey of Hours and Earnings, NOMIS
ENTREPRENEURSHIP: ‘The North West has lower than average self employment however there are areas with high rates of business births’ The North West has a relatively low level of entrepreneurial activity, with only 7.8% of all working age people (aged 16-64) who within the region, self-employed in 2009. This compares with the England average of 9.1% and is an increase in the North West of 11,700 on the previous year where the figure stood at 7.5% of the working age population. The rate of business births in the North West in 2008 stood at 49.6 per 10,000 population aged 16+, 4.8 lower than the figure 12 months earlier. However the North West rate was the fourth highest of all English regions after London, South East and East. The average three year survival rate for North West businesses started in 2005 was 64.8%. This was the 5th highest rate of all English regions and just 0.1% lower than the overall UK figure. The 12 month survival rate for North West business started in 2007 stood at 95.6%, again ranking the North West 5th of all English regions and very close to the UK average of 95.6%. There are large disparities in the start-up rate in the North West’s business centres. In 2008 Macclesfield had the highest rate of business births by far in the North West at 84.1 per 10,000 population aged 16+ whilst Knowsley experienced the lowest rate at 32.2. A full breakdown of business birth rates can be found in table 4 in the Appendix.
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
RIU OUTLOOK: ‘Modest economic and job growth expected alongside public sector spending cuts’ The North West economy has emerged from recession. Low interest rates, a fall in the exchange rate and lower than expected unemployment have allowed recovery ahead of schedule. Survey evidence suggests that the North West is as well placed as any UK region to capitalise on improving trading conditions. The Regional Economic Forecasting Panel expects official data to confirm that the region’s economy emerged tentatively from recession in early 2010. While growth should then strengthen, it will remain weak through to 2013. The Panel expects modest growth for the region this year, with the balance of risk on the downside. In particular, many jobs and many new orders in construction and services are highly vulnerable to lower public spending from 2011 onwards. The Panel does not expect the economic recovery to create a substantial number of new jobs in the region over the forecast period. During the recession, firms and workers have responded to limit job losses, implemented flexible working arrangements, and established new pay deals. There has also been recognition on the part of employers of the costs that would be incurred in re-recruiting workers to exploit the recovery when it came. This has led to the retention of staff but also a large increase in people working on an under-employed basis. Given this, as the recovery becomes established, firms will for some time be able to meet increased demand by reinstating full-time working where it had been cut, rather than by recruiting more staff. At the same time, in the public sector, whilst this has been a major source of employment growth over the past decade or more, employment prospects for the future are sanguine. Over 2011-13, public sector employment is expected to fall alongside the cuts in public spending. The North West is more reliant on the public sector for employment than the UK as a whole therefore plans for future government spending may impact disproportionately on the region. It still remains to be seen how this will pan out in the North West but the scale of the job losses is likely to exceed the increase in private sector employment, which the Panel expects to be modest by historical standards, particularly in financial & business services. The outlook is therefore that non-employment will rise further in these years; the impact on unemployment will depend on how the job losses are achieved (e.g. through early retirement etc). The Panel does not anticipate the North West economy achieving year-on-year growth in overall employment during the period of this forecast.
Prepared by: Research & Intelligence Unit, Updated October 2010 Data Sources: Population: Table 8 Mid-2008 Population Estimates: Selected age groups for local authorities, ONS GVA: Regional Accounts, ONS, December 2009. Analysis taken from GVA in the North West Briefing, produced by the ONS North West Regional Presence, December 2009 Employment by Sector and Number of Businesses: Annual Business Inquiry 2008 - Employee Analysis, NOMIS Employment: Annual Population Survey, NOMIS. Unemployment: Annual Population Survey, NOMIS Claimant Count: Claimant Count with Rates and Proportions, NOMIS and Claimant Count with Age and Duration, NOMIS Wages: Annual Survey of Hours and Earnings, NOMIS Self Employment: Annual Population Survey, NOMIS Business Births: Business Demography Statistics - 2008, ONS and Mid Year Population Estimates, ONS Business Survival: Business Demography Statistics - 2008, ONS Business Forecasts North West, Spring 2010, Regional Economic Forecasting Panel
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
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Appendix Table 3: Number of Companies by Size and by Sector 2008
Agriculture & Fishing Energy & Water Manufacturing Construction Wholesale, Retail & Repair Hotels & Restaurants Transport, Storage & Comms Financial Intermediation Real Estate, Renting & Business Public Admin Education Health & Social Work Other Services Total
1-10 employees North West England Number % Number %
11-49 employees North West England Number % Number %
50-199 employees North West England Number % Number %
200 or more employees North West England Number % Number %
North West Number %
1,900 300 12,800 23,400
0.9 0.1 6 11
18,400 2,100 108,000 206,500
1 0.1 5.9 11.2
100 100 3,100 1,700
0.4 0.3 9.7 5.5
900 700 22,500 11,400
0.4 0.3 9.3 4.7
! ! 1,100 400
! ! 13.2 4.5
! ! 6,700 2,300
! ! 11.2 3.8
! ! 300 100
! ! 14.3 3.3
! ! 1,800 400
! ! 12.9 2.9
! ! 17,200 25,600
48,300
22.6
368,400
20
6,600
20.9
51,500
21.2
1,100
14
8,700
14.4
300
17.7
2,300
16.8
14,100
6.6
114,900
6.2
4,000
12.4
29,100
12
500
6.1
3,600
6
9,500
4.4
76,000
4.1
1,300
4.1
10,400
4.3
500
6.1
3,700
6.1
200
8.6
5,200
2.4
40,800
2.2
1,000
3.2
8,300
3.4
200
2.3
1,600
2.6
100
4.8
67,500 900 2,600
31.6 0.4 1.2
642,000 9,100 23,400
34.8 0.5 1.3
4,200 700 2,300
13.2 2.2 7.3
36,200 5,700 16,800
14.9 2.3 6.9
1,100 400 1,400
14.2 5.4 17.5
9,800 3,000 10,500
16.2 5 17.4
300 200 100
17.6 11.8 8
9,700 17,500
4.5 8.2
74,500 160,300
4 8.7
4,800 1,900
14.9 5.9
34,800 14,500
14.3 6
900 400
11.5 4.5
6,800 3,200
11.3 5.3
200 100
213,700
100
1,844,400
100
31,800
100
243,000
100
8,000
100
60,100
100
1,800
0
Total
6.7 10
! ! 139,100 220,600
56,400
22
431,000
20
2
18,500
7.3
147,800
6.8
1,200
8.6
11,400
4.5
91,300
4.2
700
5.3
6,500
2.5
51,500
2.4
2,700 1,500 1,300
19.4 10.8 9.7
73,200 2,300 6,500
29 0.9 2.6
690,600 19,300 52,000
32 0.9 2.4
8.6 2.8
1,000 500
7.4 3.3
15,500 19,800
6.1 7.8
117,100 178,400
5.4 8.3
100
13,800
100
255,400
100
2,161,300
100
2
300
! !
England Number % ! ! 6.4 10
Source: Annual Business Inquiry Employee Analysis 2008, NOMIS Note: Totals may not sum due to rounding. All data has been rounded to the nearest 100 in line with ABI methodology ! Data is suppressed
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
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Table 4: Business Births – Rates per 10,000 Population Aged 16+
2007
2008
Change 2007-2008
United Kingdom England
56.7 59.5
54.2 57.2
-2.6 -2.4
East East Midlands London North East North West South East South West West Midlands Yorkshire & Humber
60.4 52.0 86.4 42.0 54.4 63.1 53.7 52.7 48.4
56.5 46.8 95.4 36.8 49.6 60.1 49.0 47.6 44.3
-3.9 -5.2 9.0 -5.2 -4.8 -3.0 -4.7 -5.1 -4.1
Allerdale Barrow-in-Furness Blackburn with Darwen Burnley Bury Carlisle Chester Chorley Congleton Copeland Crewe and Nantwich Eden Ellesmere Port & Neston Fylde
57.4 56.6 60.7 40.9 58.8 49.6 71.1 62.6 70.3 57.4 51.9 57.2 45.8 66.9
44.3 47.8 51.7 43.9 55.6 40.7 58.7 59.6 64.9 46.0 48.7 50.1 37.5 59.3
-13.1 -8.8 -9.1 2.9 -3.2 -8.9 -12.4 -2.9 -5.4 -11.4 -3.1 -7.1 -8.3 -7.6
Halton Hyndburn Knowsley Lancaster Liverpool Macclesfield Manchester Oldham Pendle Preston Ribble Valley Rochdale Rossendale Salford Sefton South Lakeland South Ribble St. Helens Stockport Tameside Trafford Vale Royal Warrington West Lancashire Wigan Wirral Wyre
2007 47.2 50.9 29.4 41.8 46.1 84.5 56.4 47.9 46.7 60.1 72.6 47.1 59.9 49.5 45.4 69.5 60.8 42.1 65.5 46.1 76.5 63.5 65.9 52.4 48.4 47.1 51.5
2008 45.0 42.4 32.2 42.7 41.8 84.1 55.7 45.4 37.4 57.7 66.0 48.2 53.8 50.5 39.9 58.0 54.0 35.2 57.9 40.3 72.2 53.9 55.6 47.4 40.3 39.7 43.8
Change 2007-2008 -2.2 -8.6 2.8 0.9 -4.3 -0.4 -0.6 -2.5 -9.3 -2.5 -6.7 1.1 -6.1 1.0 -5.4 -11.6 -6.7 -6.9 -7.7 -5.8 -4.3 -9.7 -10.3 -5.0 -8.2 -7.4 -7.7
If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.
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If you would like to know more about the work the RIU could do for you on this topic, please contact Emma Ibberson on: 01925 400290 or Emma.Ibberson@nwda.co.uk. We are always looking for new ideas to help you improve your decision making, please get in touch if you want to discuss any of your ideas with us.