Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA 13 August 2007
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Contents
Executive Summary ....................................................................................................................................................................................................................... 1 1: Introduction .............................................................................................................................................................................................................................. 10 2: Broader economic context...................................................................................................................................................................................................... 11 3: Analysis of sub-regional trends ............................................................................................................................................................................................. 17 4: Forecasts for the sub-region .................................................................................................................................................................................................. 75 5: Summary SWOT analysis........................................................................................................................................................................................................ 91 6: Appraisal of strategic priorities.............................................................................................................................................................................................. 96
Annex A: Travel to work flows - Cheshire & Warrington districts ........................................................................................................................................ A-1 Annex B: Sector profiles – Cheshire & Warrington districts................................................................................................................................................. B-1
Contact:
Mike Palin
Tel:
Approved by:
David Mack-Smith
Date:
0161 475 2102
email:
mpalin@sqw.co.uk
13/08/07
Associate Director, SQW Consulting
www.sqw.co.uk
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Executive Summary
Introduction Cheshire & Warrington is one of the most successful sub-regions in the UK. Gross Value Added (GVA) per capita has consistently stood higher than the UK average, household earnings have been high, the population is highly skilled and unemployment is low. In addition, the natural environment combined with such factors as high educational attainment mean that Cheshire & Warrington is a place where people want to live, and where residents enjoy a high quality of life. But such success is never guaranteed. Recent growth in GVA per head has lagged that of the UK, and proposed job losses from some of the subregion’s most successful businesses show that success is something that is built, and continually needs building upon. In October 2004, the Cheshire & Warrington Economic Alliance (CWEA), the sub-regional partnership for Cheshire & Warrington published “Investing in Success”, the sub-regional economic strategy for Cheshire & Warrington. The strategy acknowledged the success of Cheshire & Warrington, and provided a framework for maintaining that success for the years to come. Now, three years on, there is a need to review Investing in Success and ensure that it continues to respond to the critical issues being faced, and the potential opportunities that present themselves. This Economic Review and Forecast report therefore is designed to provide the evidence with which the CWEA, and partners, can refresh Investing in Success and
meet the needs of today. The report itself was commissioned jointly by CWEA and the North West Development Agency (NWDA). It therefore not only aims to meet the needs of the sub-region, but recognises the role Cheshire & Warrington plays within the North West, and the North as a whole, as a key driver of economic growth.
Messages from the data Headline indicators GVA per head, a measure of wealth in the economy, in 2004 stood at £17,650 in the Cheshire County Council area and £19,800 in the Halton & Warrington area1 - both above the UK figure (£17,450) and well above the North West average (£15,000). However, although Halton & Warrington’s and performance has been strong throughout the period from 1994 (between 10% and 15% better than the UK), the figure for the Cheshire County Council area has declined from being the highest in the North West in 1994 (16% above the UK) to being just 3% above the UK figure in 2004. With regard to adjacent economies, Greater Manchester South has seen rapid GVA per head growth and has surpassed the Cheshire CC and Halton & Warrington to be the best performing NUTS3 area in the North West. Gross disposable household income in Cheshire, however, continues to be well above the averages for other North West sub-regions and continues to increase at a rate greater than that for the UK. Cheshire residents are becoming increasingly affluent, and the sub-region continues to attract people by offering a high quality of life. 1
Halton is included within the NUTS3 area with Warrington.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Demographics The population of Cheshire & Warrington has risen by 8% since 1981 compared with 1.4% growth in the North West and 6.7% in Great Britain. Highest growth was in Congleton, Crewe & Nantwich, Vale Royal and Warrington, while there was actually a decline in the population of Ellesmere Port & Neston. Migration flows into Cheshire & Warrington have increased over recent years with particular districts attracting considerable flows from both within the UK and internationally. Crewe & Nantwich has been the most notable destination for both migrants from within the UK and migrants from overseas. Migration into the sub-region has generally been to those locations where growth in the number of jobs has been greatest. Of notable concern is the declining proportion of the Cheshire & Warrington population who are of working age and in particular, the notably low (and declining) proportion of the population aged 20-39 – there has been a 12% reduction in this age group since 1995, with the issue particularly notable in the Cheshire County Council area. Commuting flows Overall, over 70% of workers both live and work within the sub-region, and there is a modest net inflow of workers (5,900)2. The pattern varies considerably between districts, however, with Congleton and Vale Royal exhibiting net outflows of over 10,000 movements and Chester and Warrington exhibiting net inflows of over 10,000 movements. Chester has a strong relationship with North Wales (attracting workers into Chester),
while there are notable movements to Manchester and Stockport from the eastern parts of the sub-region. Housing House prices in Cheshire & Warrington are generally high, with average prices in 2006 close to the ÂŁ200,000 level and on a par with the average price nationally. Affordability is therefore an issue with prices in Cheshire & Warrington being more than 25% above the North West average, while the ratio of average earnings to average house prices shows that it is becoming increasingly difficult to purchase a home. The supply of housing (new builds) varies across the sub-region. In 2005/06 over 50 new builds per 10,000 population were completed in Warrington and in Crewe & Nantwich but just 18 in Chester and in Vale Royal. Nationally (in England), house building completions stood at 32.4 per 10,000 population. Employment and industry structure Job growth within Cheshire & Warrington has been markedly strong, with 26,100 jobs created since 2000. Crewe & Nantwich (6,800 jobs), and Warrington (5,000 jobs) saw the highest growth, while Congleton (800 jobs) saw the lowest growth. All districts in the sub-region experienced job growth at or above the Great Britain level between 2000 and 2005, apart from Vale Royal and Congleton. The number of jobs within Cheshire & Warrington has supported high levels of economic activity within the labour market. Activity levels are comfortably above the North West and Great Britain averages, except in
2
Based on 2001 census data – it is likely that there will have been changes to flow dynamics since the data was recorded.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Ellesmere Port & Neston where there is a particular issue with economic activity amongst 16-24 year olds.
national average. However, there is some evidence of earnings in Chester and Vale Royal lagging significantly behind UK growth since 2002.
Employment in public sector occupations is relatively low in Cheshire &1.1 Warrington, while employment in the service sector has grown more rapidly than in the North West and Great Britain since the mid-1980s. The representation of service sectors within the economy (based on employees within each sector) is broadly in line with the UK (within ±0.5 of a location quotient3). The sub-region however has a considerable specialism in a number of manufacturing sectors – pharmaceuticals, the manufacturing of fuels, water supply, and motor vehicles – all key sectors for the sub-regional economy, with pharmaceuticals in particular having witnessed considerable growth since 2000.
Residence based earnings (i.e. the money earned by people living in Cheshire & Warrington) present a different picture. Weekly median gross full time earnings in the Cheshire County Council area in 2006 stood at £480. The figure in Warrington mirrored that of Great Britain (just under £450) while the North West figure stood at just £420. The difference between workplace and residence based earnings in Cheshire reflects the presence of high-earners who work outside of Cheshire but who choose to live in the county.
As recognised in Investing in Success, one of Cheshire & Warrington’s most significant assets is the knowledge base within the sub-region’s businesses. The sub-region continues to have a higher proportion of employment (12%) in knowledge intensive businesses (KIBs) than the North West (9%) and Great Britain (10%). Similarly, the sub-region has a higher proportion of workers in higher end occupational classifications – a trend that has grown above the rate for Great Britain in all districts except Crewe & Nantwich and Ellesmere Port & Neston.
Productivity measures the level of GVA output per worker in the economy. The general trend sees GVA per worker rising over time with productivity being considerably higher in Cheshire & Warrington compared with other North West sub-regions. Obviously, the sectoral mix of an economy influences the overall level of productivity. The pharmaceuticals sector, which is very highly represented within the economy has high levels of productivity and witnessed productivity growth between 2000 and 2005 - as have other sectors, such as computing services.
Earnings Workplace earnings (those wages paid by businesses located in Cheshire & Warrington) have tended, overall, to stay relatively closely to the
Productivity
Increasing productivity and raising GVA per worker is a key policy objective of the UK Government, and skills, investment, competition, innovation and enterprise have been identified as key ‘drivers of productivity’ in which the UK must improve.
3
A location quotient gives an indication of the relative concentration of sectors in Cheshire & Warrington compared with a comparator – in this case, the UK. A location quotient of 1 shows an equivalent share of employment in a sector to that in the UK.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Skills
Cheshire & Warrington has a highly qualified working age population. In 2005/06 over 31% were qualified to NVQ Level 4 or above, with only around 13% having no qualifications. These figures out-perform all North West sub-regions and the national comparator. Importantly, the growth in population with NVQ Level 4+ (5 percentage points between 2000 and 2005 in Cheshire & Warrington) is well above the national rate of growth (3.2pp) and is driven by very considerable growth in Congleton (13pp), Vale Royal (9pp) and Macclesfield (8pp). Of concern, however, are Chester and Crewe & Nantwich where the proportion with NVQ4+ actually dropped. In addition to overall qualification levels, Cheshire & Warrington contains some of the best performing districts nationally in terms of GCSE attainment, while a low proportion of 16-19 year olds are not in employment, education or training (NEET). Despite all of these areas of strong performance, and possibly because overall employment levels are high and the labour market is tight, there are emergent skills shortages in the sub-region – particularly in specialist areas of expertise and in ‘softer’ inter-personal skills. Investment
Capital investment in businesses acts as a key stimulant to improvements in productivity. Businesses in Cheshire & Warrington invest more, per employee, than those located in the North West and the UK. UK owned firms in Cheshire & Warrington generally make higher capital investments than UK firms in the North West and UK. Similarly, foreign owned firms are showing a trend of investing considerably more in Cheshire & Warrington per employee than in the North West and UK.
Rising levels of investment are also reflected in increases in construction activity within the sub-region, while levels of previously developed land have declined. Nonetheless, the sub-region still contains 1,800 hectares of previously developed land that could be developed. Competition
Data on the levels of competition faced by businesses in Cheshire & Warrington is not readily available. One proxy measure, however, is the proportion of employment in foreign-owned businesses (which, by definition, are owned by groups operating in international markets). The proportion of employment in foreign-owned firms has shown substantial growth – from 10% in 2000 to 15% in 2004; this is broadly in line with the national average, but has been consistently rather higher than the North West average (13% in 2004). Innovation
Cheshire & Warrington businesses are more likely to utilise IT and computing systems than businesses in the North West or any of the North West’s sub-regions, while the take-up of broadband has also been relatively high. At a headline level, the sub-region continues to demonstrate very high levels of research and development (R&D) expenditure compared to the North West and Great Britain. However, the research suggests that this is heavily skewed by the presence of AstraZeneca; if that firm’s R&D were to be excluded, the average R&D spend per adult would be below that for the North West and the UK.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Enterprise
Cheshire & Warrington is an enterprising place – VAT registration rates are 4 and 11 percentage points above the Great Britain and North West figures respectively. In 2005, 53 businesses per 10,000 population were registered within the sub-region. Indeed, growth in registrations between 2000 and 2005 was above the Great Britain rate in all districts except Vale Royal. This has led to a considerable net increase in the number of businesses within the economy (nearly 20% since 1994), while business survival rates are also good. Deprivation Cheshire & Warrington has ‘pockets’ of deprivation, but deprivation across the sub-region is generally low. Only 3.5% of the sub-region’s Super Output Areas (SOAs) are amongst England’s most deprived 10%. Unemployment is generally low in Cheshire & Warrington and is below the Great Britain figure in all districts, but the sub-region does have a number of local area concentrations of high incapacity benefit (IB) claimants.
Looking forward: forecasting economic performance Recent historical GVA growth According to recent data, Cheshire & Warrington underperformed the North West and UK in terms of GVA growth over 2000-04, a turnaround from the previous two decades.
Growth is also estimated to have been faster in Merseyside and Greater Manchester over this period. The relatively weak GVA performance in Cheshire & Warrington over 2000-04 was mainly due to slower growth in manufacturing industries, such as manufactured fuels, other transport equipment, chemicals, food, drink & tobacco, rubber & plastics and mechanical engineering, due to slower productivity growth in these industries. Some service sectors, such as professional services, education and miscellaneous services, also saw slower relative growth than in the North West and UK, although only professional services is estimated to have seen slower productivity growth, with education and miscellaneous services seeing falls in employment. Pharmaceuticals made a very strong positive contribution to GVA in the sub-region over this period (2000-04). The forecast The recent relative underperformance of the Cheshire & Warrington economy compared to the North West as a whole is expected to be a short term phenomenon, and the outlook is that the trend growth within the subregion will again be faster than for the North West as whole (2½% p.a. vs. 2¼% p.a.). However, much depends on the prospects for key sectors, and in particular pharmaceuticals. The relative performance of the sub-region will be weaker than was seen during the second half of the 1990s. However, the growth underperformance relative to the UK economy is expected to persist, though the extent of the underperformance is likely to be less than has been seen since 2000.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Despite the improvement in relative growth prospects, employment in Cheshire & Warrington, which has lagged growth in the North West in recent years, is only expected to grow at a similar rate to the North West average in the long term (½% p.a.), slightly slower than the UK average. The sub-region’s population grew by a little more than 10% over 19902005. The outlook is that future growth will average 0.2-0.3% p.a. This is a similar rate of growth to that forecast by CE for the North West as a whole, but slower than for the UK. While the total population in the sub-region is expected to rise, the age profile is such that the working age population is expected to fall modestly. This in turn could hold back economic growth. The implication of the forecast is that the gap in GVA per capita between Cheshire & Warrington and the UK, which has narrowed in recent years as GVA growth slowed in the sub-region, will widen once again, albeit modestly. There is uncertainty over the extent to which a forecasted decline in the working-age population will hold back economic growth. One impact could be an increase in commuting from neighbouring areas. The Cheshire & Warrington economy is expected to benefit from strong GVA growth in manufacturing, as well as services, although strong productivity growth means that employment in manufacturing in the subregion is expected to continue falling in the long term, albeit not as strongly as in the 1980s or 1990s. Within services, the strongest GVA growth is expected in communications, computing services, professional services and nonfinancial business services. These are also the sectors where strong job
growth is expected, although large sectors such as retailing and health & social work are expected to see fairly large absolute increases in employment. Key sectors in the forecast The long-term prospects for banking & finance, computing services and professional services in Cheshire & Warrington are all dependent to some extent on the success of Omega. In the medium to long term, the site is expected to increase the attractiveness of the sub-region to firms within these industries. Prospects for retailing, the largest industry in Cheshire & Warrington in terms of employment, are for growth slightly slower than the North West as a whole in the long term, as relatively strong growth is expected in the larger shopping areas of Liverpool and Manchester. Growth in hotels & catering is expected to be similar to the North West average, but still some way behind the UK average. Pharmaceuticals accounts for just over 6% of employment in Cheshire & Warrington (all in Cheshire). GVA growth is expected to be strong in the long term, although not as fast as in the North West or UK as a whole, and employment is expected to fall at a somewhat faster rate than in the North West and UK. The importance of pharmaceuticals to the Cheshire & Warrington economy is such that the outturn for this industry could be a deciding factor in whether the Cheshire & Warrington economy does actually outperform the North West or not in the long term.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
SWOT
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Declining numbers of young adults
Based on the evidence reviewed and analysed, the following strengths, weaknesses, opportunities and threats have been identified:
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Emerging skills shortages
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Pockets of severe deprivation
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Lack of a focal point
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Difficulties in deliverability of bringing land into use
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Poor internal connections
Strengths •
High quality of life
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Proximity to Manchester and Liverpool
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Affluent residents
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Well-qualified residents
Opportunities •
Strengthening Cheshire & Warrington’s position in high value added service sectors
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A diverse economy
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Good external connections
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Exploiting previously developed land
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High proportion of employment in knowledge intensive businesses
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Benefiting from the renaissance of Manchester and Liverpool
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High levels of engagement in economic activity
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Harnessing the economic contribution of inward migrants
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Strong growth in business stock built on high levels of entrepreneurship
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Benefiting from the development of the University of Chester
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Using changing demographics to the sub-region’s advantage
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Creating local employment opportunities for outward commuters
Weaknesses •
Relatively slow GVA growth in recent years
•
Decline of some important high productivity sectors
Threats • •
Pressure on the pharmaceuticals sector - employment and GVA
Flat workplace-based earnings growth in some districts
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
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Ongoing pressures on other manufacturing sectors and the risks of ‘shocks’ to the economy
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Threat of re-location/offshoring of high GVA service sector jobs
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Housing pressures leading to worsening skills shortages
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Risk of mid Cheshire becoming a dormitory economy
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Risks associated with success
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Failures to spread benefits of strong economic performance
Identified priorities for the sub-region
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Responding to pockets of severe deprivation
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Preventing a dormitory economy developing in mid Cheshire
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Harnessing the benefits of inward migration
These proposed priorities are not intended to be prescriptive, but they provide an indication of the areas CWEA may wish to consider and respond to. in the meantime, we have used them as the basis for our appraisal of portfolio of current interventions included within the Investing in Success Action Plan.
Appraising current investment plans
Based on the SWOT assessment, a number of key potential priorities have been proposed for consideration by CWEA and wider partners. These are shown in Table 1.
Thirteen set of intervention were identified from the Investing in Success Action Plan, and these have been appraised in two ways:
Table 1: Potential future priorities
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Each project, and the resources allocated to them, has been mapped in terms of the extent to which it supports higher productivity employment vs lower productivity employment, and the extent to which it is focused on deprived communities.
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Each project has been appraised in terms of its likely contribution towards each of the potential priorities that emerged from the SWOT assessment.
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Strengthening Cheshire & Warrington’s position in value added service sectors
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Mitigating the impact of, and realising the opportunities from, demographic change
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Mitigating the risks of contraction in high value manufacturing
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Addressing the shortage of appropriate and affordable housing
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Maintaining a high quality of life and sense of place, to maintain the sub-region’s attractiveness as a place to live, work, study and visit
•
Creating local employment opportunities for outward commuters
•
Exploiting and bringing forward previously developed land
•
Addressing flat income growth in Chester and Vale Royal
Conclusions of the appraisal process Our key conclusions on the current portfolio of interventions are as follows:
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
There is a considerable amount of projected NWDA expenditure in projects which are associated with relatively low productivity employment and which are not particularly responding to the needs of deprived areas. While such projects may add value in other ways, CWEA should consider whether the portfolio is too heavily weighted towards visitor economy initiatives.
•
The portfolio of interventions appears to lack any initiative which is strongly focused on high GVA per employee economic activity. CWEA should consider whether enough is being done to ensure that the sub-region remains attractive to current and potential future employers in the highest productivity sectors.
•
While the current portfolio of interventions appears to be addressing the ‘pockets of severe deprivation’ and ‘quality-oflife/sense of place’ priorities reasonably well, the portfolio did not appear to be contributing much towards the ‘affordable housing’ and ‘benefits of inward migration’ priorities. CWEA should consider whether it agrees with our proposed priorities, and, if so, whether there is a need to strengthen the portfolio’s response to those priorities that currently appear to be underaddressed.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Manchester city regions as well as other key sub-regional economies such as North Staffordshire and North Wales).
1: Introduction • •
•
In May 2007, the Cheshire & Warrington Economic Alliance (CWEA) and North West Development Agency (NWDA) commissioned an economic review and interpretation of the Cheshire & Warrington economy, and the development of economic forecasts for the sub-region. This report represents the combined outputs of those two studies which have been collectively delivered by SQW Consulting (SQW) and Cambridge Econometrics (CE).
The report is structured as follows:
section 2 considers the wider, global and UK economic context for Cheshire & Warrington’s future development
section 3 reviews the recent performance of the Cheshire & Warrington economy4, drawing comparisons with national and regional trends as well as with neighbouring local authority areas5
section 4 presents our medium term (2010) and long term (2020) forecasts for the sub-regional economy, in the context of its historic performance and UK and regional projections
section 5 provides a summary SWOT (Strengths, Weaknesses, Opportunities, Threats) assessment of Cheshire & Warrington based on the analyses of sections 2, 3 and 4
section 6 appraises the current strategy and action plan, in the light of our SWOT analysis and supporting evidence.
The report is intended to support CWEA and partners in the process of updating and refreshing ‘Investing in Success’- the subregional economic strategy and action plan- by providing:
a better understanding of how the sub-regional economy and its component parts are performing,– with a particular emphasis upon the productivity/GVA imperative
an evidence-based and objective approach to policy development, drawing on a wide base of data sources, intelligence and economic development best practice
support for breaking out of ‘silo’ thinking, in order to develop more rounded, cross-thematic (and where relevant cross-boundary) policy interventions across the sub-region and neighbouring areas (including a greater appreciation of the complex linkages with the Liverpool and
4
Care should be taken when interpreting some of the sub-regional level data; in some cases, sampling errors tend to make data rather volatile for smaller geographic areas. 5 We typically show data for the Cheshire & Warrington districts in the context of the neighbouring authorities in the North West, West Midlands and North Wales.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
2: Broader economic context
•
When considering the economic prospects of a sub-regional geography, it is important to base any analysis within the regional context. However, it is also essential to position the development of the sub-region within the overarching national context. This is because national events and the condition of the associated economy have a direct impact on the regional economy which in turn affects the sub regional economy. This section seeks to summarise the future opportunities and challenges likely to be faced by the UK, in its global context, and the implications that these may have on the sub-regional economy for Cheshire & Warrington.
Longer-term opportunities and challenges •
In November 2006, the Treasury published a report entitled ‘Long-term opportunities and challenges for the UK: Analysis for the 2007 Comprehensive Spending Review’6. This report highlighted the following five challenges that are likely to impact on the UK and its future growth potential:
6
Demographic and socio-economic change - meeting the challenges of an ageing population and the associated rising consumer expectations of public services
“Long-term opportunities and challenges for the UK: Analysis for the 2007 Comprehensive Spending Review”, HM Treasury, 2006
•
Globalisation - the balance of international economic activity is currently shifting towards the emerging markets of both China and India, which implies an increase in cross-border competition
Innovation and technological diffusion - the pace of innovation and technological diffusion is a key driver of productivity in the economy and hence, bear an important role in the creation of more competitive markets
Increasing pressures on natural resources and global climate - as the cost of carbon rises in response to tighter climate change mitigation policies, further industrial restructuring will be required. This will be particularly relevant to the UK economy, where some of the northern regions are still relatively specialised in some carbonintensive industrial sectors
Continued global uncertainty7 - addressing the ongoing threats of international terrorism and global conflict.
These challenges and how they relate to Cheshire & Warrington are dealt with below.
Demographic and socio-economic change •
The UK is predicted to experience significant demographic change over the next ten years and over the longer term. During this period it is likely that it will witness further increases in
7
As global uncertainty is viewed on a national basis, we have chosen not to expand on this component.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
population, with the numbers and proportions of individuals aged 65 and over set to increase. This change in the age demographic of the population implies a decrease in the working age population which is expected to be counter-balanced by net migration, as younger migrants enter the UK to take up jobs. •
Population increases across the UK will be subject to significant regional variations, with the South East, London, the East, and the South West projected to experience significantly large increases in population. The Government projections used within ‘Long term opportunities and challenges for the UK’ by the Treasury also include assumptions about future trends in internal migration, where the East, South East and South West are predicted to witness a net internal (within UK) inflow between now and 2017. By contrast, London and the North West are assumed to observe a net internal outflow over this period.
•
Alongside population change, the UK is also set to exhibit significant socio-economic change. This entails the UK becoming more diverse in the sense that there is likely to be an increase in the numbers of women and older people entering the workforce. Average incomes are also predicted to rise, leading consumers to become more demanding, especially in relation to public services.
•
These changes are likely to imply the following for the North West region and Cheshire & Warrington sub-region:
8
population over retirement age from 19% in 2006 to 25% in 2026. This significant ageing of the population will imply an increase in the dependency ratio (the number of retired individuals relative to the number of working age individuals), which regionally currently lies at 30% and is set to increase to 42% in 20269.
Population change: The Regional Economic Forecasting Panel predicted8 an increase in the proportion of the
State of the North West Economy Long Term Forecasts March 2007
9
The Cheshire & Warrington sub-region will experience a similar population change to that of its region. This is likely to exaggerate the existing age demographic of the area, which is already skewed towards those aged above 39 years. Consequently, the ageing population is likely to have serious implications for both public services and the labour supply and associated supply of skills of the subregion.
Migration: The net internal outflow of population forecast for the North West is likely to relate to a further loss in the numbers of highly qualified younger adults (i.e. 20-34 years). Work undertaken by NWDA suggests that although there will be a net-outflow of students, the region will continue to attract many graduates and young people from other UK regions.
This trend is also likely to affect the sub-region, which will need to introduce measures to retain its younger population e.g. ensure it offers attractive job and affordable housing packages, to prevent skills shortage issues.
ibid
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Socio-economic change: The North West has recently witnessed a decrease in female economic inactivity rates and measures are currently being developed to attract older people into the workforce. Therefore, the regional economy is likely to mirror the UK economy and witness further increases in the diversity of its workforce.
the shifting balance of global economic activity
greater competition for investment flows
increasing international specialisation
greater rewards from innovation
Economic activity rates in Cheshire & Warrington currently lie above those of the North West. Therefore, it is likely that improvements witnessed in the regional economy will further enhance the position of the subregion. The risk, however, is that Cheshire & Warrington is seen by some as an attractive place in which to retire and therefore, activity rates may not increase if this increases.
higher levels of demand for skills
growing pressure environment.
The global economy is currently evolving to accommodate shifting trading patterns, the rise of new sources of economic growth and advances in technology. These changes have been partly caused by the significant rise of previously developing countries which have recently witnessed significant economic growth and are, as a result, increasing their shares of world income. For example, the Treasury has predicted that by 2017, China and India will have nearly doubled their share of world income and are likely to be bigger than the UK, French and German economies combined. Therefore, the global environment is becoming increasingly competitive, leading to the following challenges and opportunities for the UK:
energy
resources
and
the
•
In order to remain in a globally strong economic position, the UK will need to further enhance the sectors in which it holds a comparative advantage, for example, sub-sectors of the science and engineering industry. In association with this, it will be vital to increase the cultivation of both a highly qualified workforce and innovation within the workforce.
•
Focusing on the specific implications for the North West and Cheshire & Warrington economies:
Globalisation •
on
Increasing global competition is likely to result in international agglomeration, which will have adverse impacts on both the regional and sub-regional economies. That is, globalisation increases the potential for internationally organised firms to outsource their regionally located jobs and/or to shift regionally located production overseas as a means of decreasing their cost base. Therefore, it will become increasingly important for both the region and the sub-region to maintain and enhance their priority sectors.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Technological change •
Nanotechnologies - manipulate materials at a molecular level to give them enhanced properties, for example making them harder, tougher, self-healing or lighter. Nanotechnologies could enable better diagnosis and treatment of diseases, faster and more efficient computing, cleaner energy sources and more cost effective physical infrastructures
Mind and body sciences - hold the potential for new and better medical treatments based on a greater understanding of how the human mind and body function
New energy technologies - are expected over the next decade in response to the challenges of climate change, diminishing coal and oil reserves and increasing global energy requirements resulting from population growth.
Technological change is a key driver of economic growth and productivity. The Government’s Office of Science and Innovation identified eight clusters of technological development that are likely to have important consequences for the UK:
Information and knowledge management – refining and streamlining the handling of data, information and knowledge, to increase the speed and accuracy of processes in a wide range of areas, from government, to finance and engineering
Sensors and tracking – improving the monitoring, modeling and management of various systems, such as natural hazards, space and weather systems and the movement of goods and people
Network interactions - such as those between mobile phone networks and the internet have the potential to impact on many areas of life, from the nature and capacity of early warning systems to the design of organisations
New security technologies - will have benefits and implications for homes and businesses, supporting government policies aimed at crime, defence and counterterrorism
Advanced materials – in the future new ‘smart’ materials will be able to respond to changing conditions, indicating when repairs are required or even being able to self-repair and self-clean
•
The eight clusters highlight the need for the UK to prioritise its production and delivery of higher value added products and services. This in turn implies the need to encourage technological development in the fields of transport, education, security, health and energy. For example, new energy related technologies are likely to help meet the challenges of climate change and energy security.
•
Similarly, the continued economic growth and productivity of both the North West and Cheshire & Warrington economies will be heavily dependent on both national and global technological change. Therefore, it will be important for the region and its constituent sub-regions to keep pace with new forms of technology. This is also likely to imply the ongoing need to
14
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
innovate and continuously improve both transport and communication based infrastructure. Consideration should also be given to the need to retain and improve the current skills base of both the region and the sub-region to enable the development and uptake of technological developments.
Climate and environmental change •
The rate of climate and environmental change has rapidly increased over recent years and as a result has become an issue of growing global and national concern. The UK is continuing to implement measures to decrease its contribution to global warming and as a result is cited to have witnessed an improvement in its domestic environment. However, whilst population and economic growth in the UK has resulted in various positive impacts, it also places an ongoing negative pressure on both local and national environments.
•
A major focus of concern lies in the use of fossil fuels and their associated production of carbon dioxide, which has led many of the Regional Development Agencies to include the reduction in regional emission levels within their economic strategies.
•
Looking specifically at the sub-region, the relatively high levels of chemicals and heavy industry are likely to produce high levels of CO2 emissions. There is likely to be a need to accommodate further environmental regulation and carbon pricing mechanisms, which may have significant impacts on the manufacturing activities located in the sub-region.
Conclusion •
It will be important for the sub-region to consider carefully the evolving national context and the implications that physical, social, economic, demographic and environmental changes are likely to have on the local economy.
Demographics are changing, with the population ageing, and the working age population decreasing as a proportion of the total population. Migration too, is seeing the structure of populations change – attracting young people is an aim of many economies, especially attracting the most highly qualified and skilled young people.
Globalisation is increasing the levels of competition in many of Cheshire & Warrington’s markets. Outsourcing of operations, and the improving abilities of other economies to compete, mean that businesses are increasingly ‘foot-loose’ with regard to their operating location. In this context, Cheshire & Warrington must compete on the quality of the overall proposition to businesses, rather than on price.
Changing technologies enable economies to become more productive – with clustering of activity increasingly leading to local and regional specialisation. Cheshire & Warrington must ensure that its businesses are in a position to embrace and exploit the opportunities presented by new technology – of which ICT will probably have the most important impact on sub-regional productivity growth.
15
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Climate change policy will be driven at a macro-level but with an emphasis on everyone playing their part. The quality of life and environment is important to Cheshire & Warrington but its industrial mix leaves it potentially exposed to risks associated with changing environmental regulations and carbon pricing mechanisms – especially if such changes are implemented at national (or indeed European) rather than global levels.
16
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
3: Analysis of sub-regional trends
•
As shown in Figure 3-1, the Cheshire NUTS2 area10 has consistently out-performed the UK and North West averages for GVA per head of population, and is the top-performing sub-region in the North West. In 2004, GVA per head in the Cheshire NUTS2 area stood at £18,300 compared to £15,000 in the North West and £17,500 in the UK.
•
Similarly, the gross disposable household income data shown in Figure 3-2 indicates that households in the Cheshire NUTS2 area have had a consistently higher disposable income than the averages for the UK, North West and all other North West NUTS2 areas over the last ten years.
Headline indicators GVA and income per head Figure 3-1: GVA per head of North West NUTS2 sub-regions and comparators (UK, North West) 20,000 18,000
14,000
G ro s s d is p o s a b le h o u s e h o ld in c o m e p e r h e a d (in d e x e d to U K = 1 0 0 )
GVA per capita (£)
Figure 3-2: Indexed gross disposable household income for North West NUTS2 sub-regions (UK=100)
Cheshire NUTS2
16,000
12,000 10,000 8,000 6,000 1995
1996
1997
1998
1999
2000
2001
United Kingdom
North West
Cumbria
Greater Manchester
Lancashire
Merseyside
2002
2003
2004
Cheshire
Source: ONS Regional GVA accounts
•
Gross Value Added (GVA) is a key measure of wealth creation within an economy: representing the value of goods and services produced, less the costs of the inputs required to produce them.
110 105 100 95 90 85 80 1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
North West
Cumbria
Cheshire
Greater Manchester
Lancashire
Merseyside
2005
Source: ONS Gross Disposable Household Income statistics
10
Consisting of the Cheshire County Council NUTS3 area and the Halton & Warrington NUTS3 area
17
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Significantly there has been a marked year-on-year increase in Cheshire’s position relative to the UK average in the period 2002 to 2005. Note, however, that the widening of the gap between Cheshire and the UK average in terms of gross disposable household income contrasts with the narrowing of the gap in average GVA per head over the last few years.
•
Despite the continued strong GVA per head performance, and the rising levels of disposable household income at the NUTS2 scale, there is a disparity in relative GVA per head performance at the lower, NUTS3 scale.
Figure 3-3 Indexed GVA per head of North West NUTS3 areas (UK=100)
•
According to ONS estimates, GVA per capita in 1995 was 16% higher than the UK average in the Cheshire County Council NUTS3 area, and 11% higher than the UK in Halton & Warrington. Only one other North West NUTS3 area performed better than the UK – Greater Manchester South.
•
By 2004 Greater Manchester South had passed both Halton & Warrington and Cheshire in terms of GVA per head, according to the ONS regional GVA accounts. The Cheshire figure had dropped to being just 3% higher than in the UK, although the Halton & Warrington figure rose to be 15% higher than in the UK.
•
While both the Cheshire and Halton & Warrington NUTS3 areas maintain a strong position relative to the UK and other parts of the North West, the apparent relative decline of Cheshire’s position since 2000 is both surprising – given its relatively strong employment growth – and of some concern.
•
The robustness of GVA estimates inevitably reduces as the spatial area gets smaller. As discussed later in section 4 of this report, the industrial structures and employment trends in Cheshire and in Warrington would have led us to expect the opposite in terms of their relative GVA growth performance (i.e. with Cheshire performing better than Warrington).
GVA per capita (indexed to UK = 100)
120 110 W arrington Greater Manchester South
100
Cheshire CC
90 80 70 60 50 1995
1996
1997
W est Cumbria Cheshire CC Blackburn with Darwen East Merseyside W irral
1998
1999
2000
2001
East Cumbria Greater Manchester South Blackpool Liverpool
2002
2003
2004
Halton and W arrington Greater Manchester North Lancashire CC Sefton
Source: ONS Regional GVA accounts
18
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
are rural/semi-rural within commuting distances of the major centres of Manchester and Liverpool.
Quality of life 11
Figure 3-4 Rank of North West local authorities in the top 250 of the Halifax Quality of Life (QofL) rankings, 2006
A similar pattern emerges from the Experian QofL rankings released in 2003. Although the distribution does not match exactly with the Halifax rankings, Cheshire & Warrington districts again perform better than neighbouring areas.
•
200 150
Figure 3-5 Rank of Cheshire & Warrington districts and selected districts, Experian QofL rankings 2003
100 50
•
11
North West local authorities generally did not perform well: no Merseyside local authority was included in the top 250, and of the Greater Manchester authorities only Trafford made the list. Of the North West districts included in the Halifax Bank list, nearly all
The Halifax Bank PLC commissioned research to rank the top 250 local authorities in the Great Britain. A total of 15 North West local authorities (shown) made the list.
213
200 144
131
150 100 52
Halton
St. Helens
Stoke-on-Trent
Manchester
Salford
Liverpool
Wrexham
Newcastle-under-Lyme
Flintshire
Staffordhire Moorlands
Warrington
Wirral
Crewe & Nantwich
Vale Royal
0
Ellesmere Port & Neston
50 Oswestery
All seven local authority areas in Cheshire & Warrington were included in the top 250 local authorities in Great Britain as ranked by the Halifax Bank in 2006.
250
Trafford
•
245 247
Stockport
The quality of environment in Cheshire & Warrington, and its relative wealth are reflected in a high overall quality of life for its residents.
308
300
Congleton
•
Ranking out of 408 districts
350
Macclesfield
Source: Halifax Bank PLC
400
Chester
ho rle y C
W N es es to tL n an ca sh ire R ib bl e V al le C y re w e Fy an ld d e N an tw ich
Ed en
El le sm
er e
M
Po rt
&
C on gl
et on ac cl es fi e ld C he s te So r ut h R ib bl e Tr af fo rd Va le R oy al W ar rin So gt ut on h La ke la nd
0
Stafford
Ranking 1 = highest ranking
Ranking - 1 = highest ranking
250
Source: Experian
•
As will be shown later, there are many reasons for the strong performance by Cheshire & Warrington authorities – people generally have higher earnings, qualification levels and education standards are higher, and unemployment and other measures of deprivation are all lower than national levels, and certainly below the figures for many of the adjacent authorities in Merseyside and Greater Manchester.
19
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
CO2 emissions
Figure 3-7: Domestic CO2 emissions per head for selected local authorities (UK=100)
Figure 3-6: Total CO2 emissions per head for selected local authorities (UK=100) 140
300
20
•
Total CO2 emission levels per head are higher in a number of Cheshire & Warrington districts than the UK average. Ellesmere Port & Neston and Vale Royal have particularly high emission levels per head of population, with Ellesmere Port & Neston having a figure more than double the national average. High overall CO2 emissions per head within a district largely reflect the industrial mix of the local economy. The case of Ellesmere Port & Neston illustrates this: its chemical and associated heavy industry is likely to be the cause of its relatively high carbon emissions.
St
le s
Source: Local and Regional CO2 Emissions Estimates for 2004, AEA Technology for Defra, 2006
Source: Local and Regional CO2 Emissions Estimates for 2004, AEA Technology for Defra, 2006
•
gl on C
-u n st le N
ew
ca
St
po ve r Li
W
ol irr o c al kp or t St o k Wi g eon an M - T re an N n ew ch t es ca te st r le S -u al fo nd rd er -L N ym or th e C re W w St es e an . He t d le N an ns tw O ich sw es tr Tr y af W f or ar d r in gt o n C he W s te r re xh a St m af C ford on gl et on H M a c a l to n cl es fi St F l eld af in fo r Va tshi El d sh le re le R s m i re oy er M o al e o Po r la nd rt s & N es to n
W
ig
0
r o k -L y e- m e on -T m er Li rent e P o ve r p rt oo & l N St est . H on el en Sa s W l fo a r rd r in O g to sw n M es t an ry ch N es t or er th W W es re t xh am H al T r to n af fo rd W irr C al C he re w S t s te e oc r an kp d N an o rt tw i F l ch in V a t sh le ire R oy St St al af a fo rd M a ffo c rd sh i re cl e sf i M oo eld rla nd s
0
an
50
40
El
100
60
on
150
80
et
Total CO2 Emissions per head indexed to UK = 100
200
100
de
Domestic CO2 Emissions per head indexed to UK = 100
120
250
•
Figure 3-7 shows the estimated domestic CO2 emissions per head of population – it therefore factors out the business and industrial mix issues discussed with regard Figure 3-6.
•
Districts in Cheshire & Warrington fare much better on this indicator (which is dominated by emissions associated with the domestic use of gas and electricity) compared to overall emissions. Only Macclesfield, Vale Royal and Crewe & Nantwich have domestic emissions that are above the national average.
20
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Demographics
Figure 3-9: Indexed % population growth of selected districts 2000 - 2005 (GB=100)
200 150 100 50 0
Chester Ellesmere Port and Neston Warrington
Congleton Macclesfield
Crew e and Nantw ich Vale Royal
Stoke on Trent
Wirral
Ellesmere Port and Neston
Salford
Stockport
Halton
St Helens
Chester
Macclesfield
Liverpool
•
Over more recent years (since 2000), however, the population change of Cheshire & Warrington authorities has been far less pronounced. As Figure 3-9 shows, only Vale Royal and Crewe & Nantwich have seen their populations grow faster than the rate for Great Britain as a whole.
% change 1981 - 2005 1.5
Congleton
14.8
Crewe & Nantwich
15.2
Ellesmere Port & Neston
-2.4
Macclesfield
Trafford
By 2005, the population of the sub-region stood at 874,600, having grown 8.0% since 1981. This compared to a decrease in the North West population of 1.4% and an increase in Great Britain of 6.7%. Table 3-1 shows the change in population in the individual authorities, since 1981, and highlights the considerable growth that occurred in Congleton, Crewe & Nantwich, Vale Royal and Warrington.
Table 3-1 Change in population 1981- 2005, by local authority
Chester
Staffordshire Moorlands
•
Source: NOMIS Mid-year population estimates
Cheshire & Warrington District
Newcastle-under-Lyme
Source: NOMIS Mid-year population estimates
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
100 0
Cheshire and Warrington
Wigan
Flintshire
Congleton
Warrington
500 400 300 200
Stafford
-100
Wrexham
-50 Vale Royal
800 700 600
250
Oswestry
Population (000s)
1000 900
300
Crewe and Nantwich
Figure 3-8: Cheshire & Warrington population, by local authority
350
Manchester
% Change in Population 2000-2005 (GB=100)
Population growth
0.4
Vale Royal
11.7
Warrington
14.4
Source: NOMIS Mid-year population estimates
21
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Migration
•
Migration has had a significant impact on economic development over recent years. International migration, often the focus of press and political coverage, has added to the UK labour force while locally, internal flows within the UK have made a notable difference to particular locations.
•
Figure 3-10: Net internal migration into Cheshire & Warrington authorities per 10,000 population, 2004/2005
All districts witnessed a positive net balance in internal migration flows in 2004/05, except for Chester where there was a neutral effect as a result of inflows and outflows.
Table 3-2 Balance of internal migration (inflow less outflow) per 10,000 population 2001/02
2002/03
2003/04
2004/05
Chester
16.9
33.6
-8.4
0.0
Congleton
55.0
65.6
65.4
54.5
Crewe & Nantwich
89.3
71.0
88.2
70.4
-49.4
-12.3
24.7
12.4
Macclesfield
20.0
26.6
26.6
39.9
Vale Royal
89.4
88.6
64.3
48.2
Warrington
15.6
15.5
-5.2
25.7
Ellesmere Port & Neston
70 60 50 40 30 20
Source: ONS and NOMIS Mid-year population estimates
10
• Warrington
Vale Royal
Macclesfield
Ellesmere Port and Neston
Crewe and Nantwich
Congleton
0 Chester
Balance of internal migration per 10,000 population
80
Source: ONS and NOMIS Mid-year population estimates
•
In previous years however, Chester has seen both net inflows and net outflows reinforcing the impression that internal migration into Chester is relatively volatile. Ellesmere Port & Neston has moved from seeing net outflows to net inflows while all other districts have generally witnessed net inflows in every year.
Data for internal migration into and out of Cheshire & Warrington districts confirms that Crewe & Nantwich has witnessed the greatest net increase in recent years, with a balance of around +70 persons per 10,000 population in 2004/05 due to internal migration flows.
22
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
from North West districts will largely be internal flows within the region.
500 450 400 350 300 250 200 150 100 50 0
•
There has also been significant international migration into Cheshire & Warrington in recent years, particularly with the accession into the EU of a number of Eastern European states.
Wirral
St. Helens
Wigan
Wrexham
Halton UA
Flintshire
Warrington UA
Stockport
Ellesmere Port and Neston
Crewe and Nantwich
Staffordshire Moorlands
Liverpool
Stoke-on-Trent UA
Vale Royal
Stafford
Oswestry
Macclesfield
Salford
Trafford
Congleton
Chester
Newcastle-under-Lyme
Table 2-3 National Insurance registrations by non-UK residents in 2005/06 Manchester
Churn in 2005 (NW=100)
Figure 3-11: Indexed internal migration churn for selected areas, mid-2004 to mid2005 (NW=100)
All
Per 1,000 jobs
43,350
15.5
Cheshire & Warrington
5,590
14.3
Chester
1,230
19.4
270
8.5
1,380
35.4
Ellesmere Port & Neston
330
10.2
Macclesfield
790
10.1
Vale Royal
430
9.9
Warrington
1,160
11.5
North West
Congleton
Source: ONS and NOMIS Mid-year population estimates
•
•
12
However, the population churn12, which demonstrates the dynamism of internal migration movements shows how, despite there being no net impact of internal migration on Chester in the most recent year, it has greater churn than the other Cheshire & Warrington districts. Figure 3-11 shows the high level of churn in Chester in 2004-05; much of this can be attributed to Chester’s status as a university city – with inflows and outflows of students/graduates; but there are typically also high levels of churn in areas where there is a concentration of tourism related employment. All districts demonstrated higher levels of churn than in the North West as a whole: as is to be expected, since movements to and
Crewe & Nantwich
Source: Department of Work and Pensions National Insurance statistics
•
Table 2-3 shows the number of National Insurance registrations by non-UK nationals in the year 2005/6, and the number of registrations per 1,000 jobs in the economy. Overall, around 5,600 non-UK nationals registered for national insurance in Cheshire & Warrington in that year, with 2,800 of those being from Poland.
Churn = (persons in + persons out)/total population
23
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Working Age Population (000s)
Figure 3-12 Cheshire & Warrington working age population by local authority
Chester
Flintshire
Halton
Staffordshire Moorlands
Newcastle-under-Lyme
Stafford
Wrexham
St Helens
Stoke on Trent
Salford
Macclesfield
Wirral
Wigan
Liverpool
Stockport
Trafford
Congleton
Cheshire and Warrington
Oswestry
•
The WAP therefore gives an indication of the level of dependency that occurs within an economy. The dependency is the relationship between those of working age and those not of working age – the more who are not of working age the higher the level of dependency. In general terms, the higher the proportion of the total population who are of working age, the lower the dependency.
400 300 200 100
Mar 2001-Feb 2002
Mar 2002-Feb 2003
Mar 2003-Feb 2004
Apr 2004-Mar 2005
Apr 2005-Mar 2006
Chester
Congleton
Crew e and Nantw ich
Ellesmere Port and Neston
Macclesfield
Vale Royal
Source: LFS and APS
Warrington
The working age population (WAP) represents the actual population cohort that is available for work. As was discussed in section 2, the ageing of the UK population has led to considerable discussion at a national policy level on the implications of the WAP reducing as a proportion of the total population.
500
Warrington
Vale Royal
•
600
Mar 2000-Feb 2001
Manchester
Source: LFS and APS
Working age population
0 Mar 1999-Feb 2000
Crewe and Nantwich
Access to employment opportunity is clearly a key factor in determining the level of migration into an economy. Data included later shows that Crewe & Nantwich and Warrington have both seen a considerable growth in the number of jobs in the economy. Congleton, which has witnessed the lowest levels of international migration in Cheshire & Warrington, had the lowest growth in the number of new jobs.
•
250 200 150 100 50 0 -50 -100 -150 -200
Ellesmere Port and Neston
Figure 3-13: Indexed % growth in working age population for selected districts 2000 – 2005 (GB=100) % Change in WAP 2000-2005 (GB=100)
Crewe & Nantwich had a particularly high influx, relative to its size, with 35.4 registrations per 1,000 jobs in 2005/6. Both Chester and Warrington also had over 1,000 registrations each, with NI registrations of 19.4 per 1,000 jobs and 11.5 per 1,000 jobs respectively. Congleton had the lowest level, at just 8.5 per 1,000 jobs.
•
24
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
The WAP of Cheshire & Warrington has increased by 1.2% since 2000 (as shown in Figure 3-12) - significantly below the growth in Great Britain’s WAP (2.3%). However, within Cheshire & Warrington, some districts have actually seen increases above those witnessed in Great Britain.
•
•
The working age populations in Crewe & Nantwich (growth of 5.2%) and Vale Royal (4.2%) have increased substantially faster than the Great Britain average. These are the two districts that witnessed the highest internal migration flows, while Crewe & Nantwich also had the highest international migration flow.
Figure 3-14 Cheshire & Warrington population by age band
C&W population in each age band
270,000
Table 3-4 WAP as a percentage of total population
60.7
-0.9
Chester
61.6
58.3
-3.3
Congleton
66.1
61.5
-4.6
Crewe & Nantwich
58.9
62.1
3.2
Ellesmere Port & Neston
58.9
59.8
0.9
Macclesfield
60.1
59.7
-0.4
Vale Royal
62.7
61.9
-0.8
Warrington
63.1
61.6
-1.4
0-19
20-39
40-59
20 05
61.7
20 03
Cheshire & Warrington
150,000 20 01
0.2
19 99
59.9
19 97
59.7
19 95
North West
170,000
19 93
0.2
19 91
60.6
19 89
60.4
190,000
19 87
Great Britain
210,000
19 85
pp change
230,000
19 83
2005/06 (%)
250,000
19 81
1999/2000 (%)
In contrast, the working age populations of Chester and Ellesmere Port & Neston decreased over the period. Chester now has the lowest proportion of the total population that is of working age (58.3%), while Crewe & Nantwich has the highest proportion (62.1%).
60+
Source: ONS Mid year population estimates
•
These totals for working age population disguise, however, the ageing dynamic within the WAP cohort. As shown in Figure 314, there has been a 12% reduction in the number of people in the 20-39 age band since 1995, while there has been a substantial rise in the numbers aged 40-59. In Cheshire, in particular, the proportion of people who are aged 20-39 has fallen to just 23.7% well below the national average of 27.3%.
•
With net migration in this age band being positive for all districts except Chester (between 2001/02 through to 2004/05), these
Source: LFS and APS and Mid-year Population Estimates
25
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
absolute reductions are likely to reflect a dip in the birth rates in the 1970s. We have not been able to source historic birth rate statistics for Cheshire & Warrington, but we note that at a national level, birth rates in England & Wales saw a steep decline at the end of the 1960s – only recovering (to a lower level) in the 1980s. The chart below suggests that the dip in Cheshire may have been more pronounced than that seen regionally or nationally. Figure 3-15 Proportion of the population which is aged 20-39
Commuting flows •
Travel-to-work patterns show the commuting flows of individuals. This data was last collected during the Census of 2001, and there has been no subsequent update. The patterns that emerged must therefore be regarded with some caution due to the length of time that has passed since then.
•
Over 70% of commuting movements in Cheshire & Warrington are to locations that are also in Cheshire & Warrington. This represents the self-containment within the travel to work patterns.
•
Travel to work maps for individual Cheshire & Warrington districts are provided in Annex A of this document. The following maps deal specifically with the overall travel-to-work dynamics of the whole Cheshire & Warrington sub-region.
% pop which is aged 20-39 years
32.0% 31.0% 30.0% 29.0% 28.0% 27.0% 26.0% 25.0% 24.0% 23.0%
Cheshire
Warrington
North West
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
22.0%
Great Britain
Source: ONS Annual population survey
26
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-16: Place of work for Cheshire & Warrington residents in 2001
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
•
Figure 3-16 shows where residents of Cheshire & Warrington travel to work. More than 25 movements per district takes place to districts across all of North Wales, across all of the North West sub-regions, in many parts of the West Midlands and also across to areas of West Yorkshire. There are also notable movements to districts within the Greater South East - primarily to districts to the west of the capital. The numbers of movements to such distant locations are small relative to the total, but this does highlight the long distances which some of the sub-region’s residents are prepared to commute.
•
The map illustrates that, as expected, adjacent districts to Cheshire & Warrington are the main locations to which residents outcommute. Manchester was the most significant location to which people travel with 17,000 commuting movements. Other significant commuting flows were to Halton (9,700 movements), Stockport (8,900), Trafford (8,200), Flintshire (7,800), Wirral (6,800), Liverpool (6,700) and Stoke-on-Trent (4,100).
•
The data showed a clear East / West split in commuting movements out of Cheshire & Warrington. Manchester was amongst the highest for all the Cheshire & Warrington districts – but there were over 7,800 movements to Manchester from Macclesfield alone, with Stockport being the next highest destination – showing the close relationship between Manchester and the East of Cheshire. Movements to Trafford came from across northern parts of Cheshire & Warrington, while movements to Flintshire were primarily from Chester and movements to Wirral were mainly from Ellesmere Port & Neston. Adjacency remains the most important feature in travel to work movements.
27
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
There were also considerable levels of commuting into Cheshire & Warrington to work (see Figure 3-17). The most substantial flows were into Chester from North Wales (9,200 from Flintshire) and from the Wirral to Ellesmere Port & Neston (6,600), but these were the only significant movements where commuting in-flows to Cheshire & Warrington were greater than out-flows.
•
Again adjacency factors are the key to movements with Figure 3-17 showing the distribution of in-movements. The vast majority of movements into Cheshire & Warrington came from adjacent districts in the North West, West Midlands, North Wales and areas of the East Midlands (Derbyshire). The pattern varies in some ways to that in Figure 3-16 with movements from across the North of England more prominent (extending across to Humberside along the M62 corridor) and movements from the Greater South East less notable.
Figure 3-17: Place of residence for people working in Cheshire & Warrington, 2001
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
28
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Housing
Figure 3-19: Indexed % increase in average house prices in selected areas 2000 2006 (England & Wales=100)
Macclesfield
Warrington UA
Chester
Vale Royal
Trafford
Cheshire and Warrington
Stockport
Halton UA
Congleton
Stafford
Crewe and Nantwich
Manchester
Salford
St Helens
Liverpool
Wrexham
Ellesmere Port and Neston
50
Newcastle-under-Lyme
100
Wigan
90 80 Staffordshire Moorlands
150
Source: DCLG
0 1996 1997 1998 1999
Cheshire and Warrington
2000 2001 2002 2003 2004 2005 2006 (Prov) North West
•
House prices in the sub-region are, however, nearly 20% more expensive than the average in the North West. The implication of this is likely to be that, in many parts of the sub-region, the affordability of the housing offer is likely to be an issue.
•
Over the period 2000 to 2006, prices have not risen to the same extent in Cheshire & Warrington compared to the North West and other comparator districts. As Figure 3-19 illustrates, amongst the neighbouring geographies considered, Cheshire & Warrington districts have, in general, seen lower percentage increases in house prices than comparators, though increases have been above the England and Wales average.
•
In the most recent years, the percentage increases in house prices Cheshire & Warrington districts have been below those of other sub-regions suggesting a slowing of the Cheshire & Warrington housing market (see Table 3-5).
England and Wales
Source: DCLG
•
110 100
Wirral
200
130 120
Oswestry
Mean House Prices (£000s)
250
150 140
Flintshire
Figure 3-18: Average house prices for Cheshire & Warrington, North West and England & Wales
160
Stoke-on-Trent UA
Change in Average House Prices 2000-2006 (Eng and Wales=100)
Housing - prices
House prices nationally have increased at a dramatic level over recent years, and prices in Cheshire & Warrington have almost matched the national picture in terms of both the trend over time and in terms of price levels. Prices nationally and in the subregion were almost identical in 1996 and there remained only a 4% difference in 2006, by which year the average price in Cheshire & Warrington stood at over £196,000.
29
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
earnings of local residents and does not reflect the earnings of those from outside a district and who might want to move to the district.
Table 3-5 Year on year % increases in house prices 2000/01 to 2005/06 200001
200102
200203
200304
200405
200506
10
16
13
14
6
7
9
14
18
21
9
9
Cheshire & Warrington
11
15
18
17
5
7
Chester
10
12
22
21
2
6
Congleton
10
19
24
13
5
8
8
19
27
16
4
6
Ellesmere Port & Neston
12
11
24
21
7
1
Macclesfield
13
12
17
15
3
8
Vale Royal
16
9
14
18
6
Warrington UA
8
19
16
17
Greater Manchester
9
16
17
11
13
Cumbria
9
Lancashire
9
Area England and Wales
Table 3-6 Ratio of mean house price to median annual earnings North West
Crewe & Nantwich
Merseyside
2002
2003
2004
2005
2006
England and Wales
6.7
7.3
8.0
8.2
8.6
North West
4.6
5.2
6.1
6.3
6.7
Chester
5.3
6.1
*No data
7.4
7.8
Congleton
5.1
5.9
6.9
6.4
7.3
Crewe & Nantwich
4.8
5.8
6.9
6.6
7.2
7
Ellesmere Port & Neston
4.5
5.4
6.2
6.5
6.2
5
6
Macclesfield
7.2
8.3
8.5
*No data
8.6
22
10
9
Vale Royal
5.8
6.6
7.4
7.4
8.3
19
24
10
8
Warrington
5.9
6.3
7.2
7.2
6.9
13
22
22
12
8
13
22
20
8
11
Source: DCLG and ASHE – resident analysis
•
Table 3-6 shows the ratio of the average house price to the average level of residents’ earnings – the higher the ratio, the less affordable the average house. Property is generally less affordable to local residents in Cheshire & Warrington than in the North West as a whole.
•
More importantly, the table illustrates that affordability is becoming an increasing issue across Cheshire & Warrington, with the only year on year reductions in the ratio taking place in Warrington and Ellesmere Port & Neston between 2005 and 2006.
Source: DCLG
Housing – affordability •
As well as the absolute changes in house prices it is also important to consider how affordable properties are for those looking to move into them. This requires consideration of the relationship between the house price and the earnings that local people achieve. With regard to the earnings data, this reflects the
30
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Across all other districts, and all other years, the affordability ratio has increased - indicating that residents are likely to find property increasingly difficult to buy.
earning (lowest quartile) person in Chester to buy a lowest quartile property as it is an average earning individual to buy an average property (see Table 3-6) in the district in 2006. This is the only district where this is the case.
Table 3 -7 Ratio of lowest quartile house prices to lowest quartile earnings
•
The issue of affordability, particularly for historically local residents, has been raised as a concern in research into the rural economy of the North West and is likely to apply to much of Cheshire – indeed, the earnings data in this report shows how local workplace earnings have not grown as fast as resident earnings implying that those extracting higher wages from outside of Cheshire & Warrington could potentially ‘price-out’ local residents.
2002
2003
2004
2005
2006
England and Wales
4.7
5.5
6.4
6.9
7.2
North West
3.1
3.7
4.7
5.1
5.7
Chester
4.6
5.2
*No data
7.4
7.8
Congleton
4.4
5.2
6.5
*No data
7.0
Crewe & Nantwich
3.6
4.1
5.9
5.7
6.6
Ellesmere Port & Neston
3.7
4.3
4.7
5.8
5.8
Macclesfield
5.5
6.4
7.1
6.8
7.6
Housing – building completions
Vale Royal
4.6
5.4
6.7
*No data
7.0
•
Warrington
4.0
4.8
5.9
6.2
6.6
House building in Cheshire & Warrington has, unsurprisingly, occurred mainly in areas where there has been growth in jobs and migration. Crewe & Nantwich, and Warrington have witnessed the most active house building, with over 50 new homes built per 10,000 population in 2005/06. Activity has been relatively high in Crewe & Nantwich throughout the timeframe shown, while building in Warrington has doubled since 2003/04.
•
There has also been considerable growth in house building in Ellesmere Port & Neston (where builds have grown from a level of 7.1 per 10,000 population in 2000/01 to 38.3 in 2005/06). But there has been a notable decrease in the number of houses built in Vale Royal (dropping from 50.9 per 10,000 population in 2000/01 to just 18.0 in 2005/06). Chester’s recent building rates have also
Source: DCLG and ASHE – resident analysis
•
Table 3 -7 shows the ratio of the lowest quartile property to the lowest quartile earnings. It therefore reflects the affordability of the housing to those people on a lower level of earnings.
•
A similar pattern emerges as to that witnessed for average house prices. Again, housing in Cheshire & Warrington districts is less affordable than in the North West, with affordability becoming an increasing problem over time.
•
One difference that is worth noting however is the affordability of lowest quartile properties in Chester. It is as difficult for a low
31
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
been low (17.9 per 10,000 population in 2005/6). In the other districts, house building has remained relatively consistent, with between 20 and 40 units per 10,000 population per year.
housing (from 5.8 in 2002 to 8.3 in 2006) – an indicator of rising demand not being met.
Table 3-8 House completions (builds) per 10,000 population 2000/1
2001/2
2002/3
2003/4
2004/5
2005/6
England
27.1
26.3
27.8
28.9
31.1
32.4
North West
26.8
23.4
26.8
26.1
26.2
30.1
Chester
16.9
26.9
26.0
24.6
12.0
17.9
Congleton
35.7
19.5
41.5
27.9
30.9
32.4
Crewe & Nantwich
55.2
46.4
45.8
52.3
52.1
51.1
7.1
6.0
9.5
15.6
25.6
38.3
Macclesfield
25.7
24.1
25.3
19.7
18.3
21.4
Vale Royal
50.9
32.9
43.3
29.4
23.9
18.0
Warrington
24.8
24.7
25.1
27.4
32.0
54.1
Ellesmere Port & Neston
Sources: DCLG, ONS mid-year population estimates
•
Although increases in house building will be driven by market demand, the availability of land and the policies of planning bodies are of course also critically important. While the notable levels of house building in Warrington and Crewe & Nantwich can be explained as being responsive to market forces (jobs increases, population increases and migration), Vale Royal has seen a dramatic reduction, even though population and migration has increased. It is therefore unsurprising that Vale Royal witnessed one of the largest increases in the affordability ratio for
32
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Table 3-9 Change in jobs and growth rates from 1998 and 2000 to 2005, Cheshire & Warrington districts and North West sub-regions
Employment and industry structure
Net new jobs since
Jobs
No of people in employment (000s)
Figure 3-20: Cheshire & Warrington jobs by local authority
2000
1998
2000
6,400
4,800
9.2
6.9
400
800
1.2
2.4
13,900
6,760
26.3
12.8
100
2,200
0.2
6.6
Macclesfield
1,800
5,400
2.3
6.8
Vale Royal
3,200
1,500
6.8
3.3
Warrington
8,700
5,000
7.9
4.5
Cheshire & Warrington
34,600
26,400
8.1
6.2
Greater Manchester
92,300
41,800
7.9
3.6
Merseyside
43,300
40,600
7.3
6.8
700
10,300
0.4
5.2
20,500
26,100
3.4
4.3
Congleton
400
Crewe & Nantwich
350 300
Ellesmere Port & Neston
250 200 150 100 50 0 1998
1999
2000
2001
Chester Ellesmere Port and Neston Warrington
2002
2003
Congleton Macclesfield
2004
2005
Crew e and Nantw ich Vale Royal
Source: ABI employee analysis
Figure 3-21: Indexed % growth in jobs in selected areas 2000 - 2005 (UK=100)
Cumbria
400 300
Lancashire
200
Source: ABI employee analysis
100 0 -100
•
The number of jobs in the Cheshire & Warrington economy rose by 6.2% (26,400 jobs) between 2000 and 2005, compared to growth of 5.1% in both the North West and Great Britain.
•
As shown in Table 3-9, the percentage increase in jobs since 1998 in Cheshire & Warrington has been higher than in any other North West sub-region, though the percentage growth in Merseyside
Wirral
Stoke on Trent
Wigan
Wrexham
Stockport
Staffordshire Moorlands
Trafford
Congleton
Salford
Vale Royal
Warrington
Manchester
Newcastle-under-Lyme
St Helens
Cheshire and Warrington
Ellesmere Port and Neston
Chester
Macclesfield
Halton
Stafford
Flintshire
Liverpool
Crewe and Nantwich
-200 Oswestry
% Change in no of employees 2000/01-2005/06 (GB=100)
1998 Chester
450
% growth to 2005 since
Source: ABI employee analysis
33
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
since 2000 has been slightly higher than in Cheshire & Warrington.
Warrington and Macclesfield remain the areas with the highest job densities.
•
Growth within the sub-region has been highest in Crewe & Nantwich (see Figure 3-21) where, in 2005, there were 13,900 more jobs compared to 1998, and 6,800 compared to 2000.
•
•
Although the overall growth has been high there have been some decreases in individual years. A number of districts witnessed drops between 1999 and 2000 including Chester, Ellesmere Port & Neston, Macclesfield and Warrington, while Congleton demonstrated a trend of job decreases year on year between 2002 and 2004, albeit with a slight increase in 2005.
Table 3-10 Job density (jobs per 100 population)
•
•
As will be discussed later, local economies can often suffer from ‘shocks’ when there are large scale job losses from individual businesses or industries. The risks of this are particularly relevant in industries where lower cost locations in developing economies are able to undercut production costs in the UK. Later sections of this report will show how some districts have a considerable concentration of employment in manufacturing – a sector where lower production costs abroad threaten UK operations.
Congleton and Vale Royal have the lowest job densities but, as shown elsewhere, these two districts have considerable commuter relationships with other areas.
1998
2005
pp change
Great Britain
42.9
45.3
2.4
North West
41.1
43.5
2.5
Cheshire & Warrington
45.2
48.5
3.3
Chester
53.0
58.9
5.9
Congleton
35.8
35.1
-0.7
Crewe & Nantwich
35.1
46.6
11.5
Ellesmere Port & Neston
39.6
40.3
0.6
Macclesfield
51.4
53.1
1.7
Vale Royal
36.6
37.5
0.9
Warrington
53.4
56.5
3.1
Source: ABI employee analysis and NOMIS Mid-year Population Estimates
Job density •
The number of jobs per 100 population provides an indication of how the extent to which an area is capable of providing local jobs to local people. Crewe & Nantwich stands out as having the greatest increase in job density in recent years, while Chester,
34
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Table 3-12 Change in part-time employment, 1998 to 2005
In terms of the proportion of those in full time and part time employment, the North West exhibits an almost identical pattern to Great Britain. However, Cheshire & Warrington has a higher proportion of full time employees, who are better paid, and a lower share of part time employees.
•
Table 3-11 Full time employment, change between 1998 and 2005
60 Part-time workers as a proportion of all (%)
Full and part-time employment
50 40 30 20 10 0
Full-time workers as a proportion of all (%)
1998
2005 Total
100 90 80 70 60 50 40 30 20 10 0
Cheshire and Warrington
1998
2005 Male North West
1998
2005 Female
Great Britain
Source: ABI employee analysis
1998
2005 Total
Cheshire and Warrington
1998
2005 Male North West
1998
2005 Female
Great Britain
Source: ABI employee analysis
•
The proportion employed in part-time employment has risen between 1998 and 2005, largely as a consequence of an increase in the proportion of men working part-time in the economy. Although Cheshire & Warrington exhibits a similar pattern to the North West and Great Britain, it has a lower proportion of males, and hence of the total workforce, in part-time employment. Across all geographies, the female full-time/part-time employment pattern has changed little between 1998 and 2005.
35
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Activity rates
•
Economic activity in Cheshire & Warrington has been consistently higher than the North West and Great Britain averages over recent years.
•
Within the sub-region, Congleton, Chester, Warrington and Macclesfield have all seen the proportion who are economically active increase relative to Great Britain since 2000. Vale Royal and Crewe & Nantwich have witnessed decreases, as has Ellesmere Port & Neston where the drop of 6pp is concerning.
•
Data for economic activity rates by age cohorts shows that Cheshire & Warrington overall has higher activity rates across all cohorts than the North West and Great Britain.
% of WAP who are economically active
Figure 3-22: Proportion of working age population who are economically active in Cheshire & Warrington, North West and UK 82 81 80 79 78 77 76 75 74 Mar 1999Feb 2000
Mar 2000Feb 2001
Mar 2001Feb 2002
Mar 2002Feb 2003
Cheshire and Warrington
Mar 2003Feb 2004
Apr 2004Mar 2005
North West
Apr 2005Mar 2006
Table 3-13 Economic activity by age band, July 2005 to June 2006
Great Britain
16-24
25-49
50+
Great Britain
66.8
84.5
39.1
North West
66.8
83.8
35.9
Cheshire & Warrington
71.4
86.8
40.0
Chester
70.3
85.8
37.6
Congleton
84.5
93.0
42.7
Crewe & Nantwich
80.5
84.6
42.4
Ellesmere Port & Neston
56.5
83.8
32.7
Macclesfield
71.3
88.4
42.9
Vale Royal
50.9
83.9
39.8
Warrington
74.2
87.9
40.1
Source: LFS and APS
10 8 6 4 2 0 -2 -4
Source: LFS and APS
Stoke on Trent
Wigan
Newcastle-under-Lyme
Vale Royal
Crewe and Nantwich
Cheshire and Warrington
Trafford
Macclesfield
Wirral
Stafford
Chester
Warrington
Flintshire
Wrexham
Liverpool
Stockport
Salford
Staffordshire Moorlands
St Helens
Congleton
Halton
Manchester
-8
Ellesmere Port and Neston
-6 Oswestry
PP Change in Econ Activity rates 2000-2005 (GB=0)
Figure 3-23: Percentage point increase in economic activity rates in selected areas 2000 - 2005 (GB=0)
Source: APS
36
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Activity rates in Congleton were very high, especially amongst young people. One area for concern however is the economic activity rates of young people in Vale Royal and also in Ellesmere Port & Neston – in both districts, activity rates amongst 16-24 year olds are markedly below the regional and national levels.
37
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
manufacturing industry in Cheshire & Warrington which is generally, less focused on labour intensive operations (which are easily moved to lower cost labour locations) and more focussed on higher-end and spatially fixed operations (e.g. chemical industries around the Dee estuary).
Industrial structure Figure 3 -24: Proportion of jobs in manufacturing and primary production for 13 Cheshire & Warrington, North West and UK
Figure 3-25: Proportion of jobs in market sector services for Cheshire & 14 Warrington, North West and UK
40
35
30
60
25
55
Proprtion of employment
20
2005
UK
Source: Cambridge Econometrics
Cheshire and Warrington
North West
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
30 1985
The proportion of jobs in manufacturing and primary production has declined considerably over recent decades, as the sector in the UK has contracted in response to increased international competition. Figure 3 -24 shows the level of decline of the last two decades. It suggests that the decline in Cheshire & Warrington has broadly followed the national trend, but that Cheshire & Warrington has always had a greater share of employment in these sectors. This may be due to the nature of
35
1981
•
40
1984
2004
2003
2002
2001
2000
1999
1998
1997
1995
1994
1993
1996
North West
45
1983
Cheshire and Warrington
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
15
50
1982
Proportion of employment
45
UK
Source: Cambridge Econometrics
•
The perception of Cheshire & Warrington being a centre of market sector services is borne out by the data, which confirms that service industries have been represented more strongly in the subregion than in the North West and nationally since the mid 1980s.
13
Produced using the CE sectoral classification: agriculture, coal, oil and gas, other mining, food drink and tobacco, textiles cloth and leather, wood and paper, printing and publishing, manufacturing of fuels, pharmaceuticals, chemicals nes., rubber and plastics, non-metallic minerals, basic metals, metal goods, mech. engineering, electronics, elec. engineering and instruments, motor vehicles, other transport products, manufacturing nes., electricity, gas supply, water supply, and construction.
14
Produced using the CE sectoral classification: distribution, retailing, hotels and catering, land transport, water transport, air transport, communications, banking and finance, insurance, computer services, professional services, and other business services.
38
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-26: Proportion of jobs in public sector services for Cheshire & Warrington, 15 North West and UK
The location quotient (LQ) gives an indication of the relative concentration of sectors in Cheshire & Warrington compared with the UK16. Having a greater share of employment in a sector when compared with the UK is clearly advantageous when that sector is expanding and has high GVA – but can be a disproportionate drag on the economy if the sector contracts for any reason.
•
28
Proprtion of employment
26 24 22 20
Figure 3-27: Change in employment by service sector (2000-2005) and location quotients against UK – Cheshire & Warrington (bubble size is proportional to total employment in 2005)
18 16 14 12
80
Hotels & Catering
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
10
Prof. Services
Other Bus. Services
Computing Services 60
Land Transport
North West
UK
Source: Cambridge Econometrics
•
In contrast, public sector employment in Cheshire & Warrington is below the national and regional level. This is likely to be due to the fact that Cheshire & Warrington lacks a major centre in which Government, and other service activities, will locate. NWDA, of course, is located in Warrington, but other public sector agencies tend to have offices in Manchester and/or Liverpool.
Health & Social Work % Change in employment, 2000 05
Cheshire and Warrington
40
Education
Retailing 0
0.0
0.5
The CE data (utilised to develop the forecasts later in this report) also provides insights on sectoral change over recent years. Figure 3-27 and Figure 3-28 respectively show this data with regard to service and manufacturing sectors in the Cheshire & Warrington economy.
1.0
1.5
Communications
Public Admin. & Def. -20
Misc. services
Insurance
•
Banking & Finance
20
Distribution -40
Location Quotient Cheshire and Warrington vs UK (2005)
Source: Cambridge Econometrics
16
15
Produced using the CE sectoral classifications: public administration and defence, education, and health and social work.
In these charts, a LQ above 1.0 (right hand side of the vertical axis) means that the sector is over-represented relative to the UK, and a LQ of less than 1.0 (left hand side of the vertical axis) mean that the sector is under-represented relative to the UK. Sectors exhibiting employment growth are above the horizontal axis.
39
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-28 Change in employment by manufacturing sector (2000-2005) and location quotients against UK – Cheshire & Warrington (bubble size is proportional to total employment in 2005)
•
The Cambridge Econometrics data also enables a view to be formed on transitions in the economy that have taken place over recent years. We can apply the following classification approach:
100
Pharmaceuticals
Shrinker sectors, are those which are in decline in terms of both absolute GVA output and the numbers of employees
Adjuster sectors, which witness growth in GVA and reductions in employment usually due to productivity gains. Rarely, adjusters can be found where employment increases and GVA output decreases but this is uncommon
Expander sectors, which witness both an increase in GVA and an increase in employment
Printing & Publishing
% Change in employment, 2000 - 05
Manuf. nes
Basic Metals
Construction
Wood & Paper
Other
50
Manuf. Fuels
Motor Vechicles Metal goods Electricity 0 -1 Non-Met
0
1
2
3
4
5
6
7
8
9
Min. Prods. Elec. Eng. & Instrum. Mech. Engineering
Water Supply -50
Chemicals Text. Cloth. & Leath
Electronics Oth. Transp. Equip
Agriculture
Rubber & Plastics
-100 Location Quotient Cheshire and Warrington vs UK (2005)
Source: Cambridge Econometrics
•
The sectoral strengths of Cheshire & Warrington are clearly shown in the charts, with pharmaceuticals, the manufacture of fuel, water supply, motor vehicles and chemicals all being substantial sectors with high location quotients.
•
Under-represented industries (relative to the UK) include public sector activities which, as already discussed, tend to concentrate in large urban centres.
•
This approach is usually used on projections data to ascertain the likely change in industrial structure going forward. However, it can also be applied to understand changes that have already occurred – here, we consider the changes in the Cheshire & Warrington economy between 2000 and 2005.
40
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
quotients – the decline of these sectors is therefore likely to have had a disproportionate drag on the sub-region’s economic growth .
Figure 3-29 Shrinking sectors, Cheshire & Warrington, 2000 -2005 (bubble size is proportional to GVA in 2005)
Non-metalic minerals
20
Public admin &
Figure 3-30 Adjusting sectors, Cheshire & Warrington, 2000 – 2005 (bubble size is proportional to GVA in 2005)
def ence
Textiles, cloth & leather
10
Chemicals nes.
30
0 -60
-50
-40
-30
-20
-10
0 -10
Mechanical
10
Distribution
20
Other
Communications
mining
engineering
-20 Change in GVA (2000 to 2005)
Change in GVA (2000 to 2005)
-70
Water supply
-30 Insurance
-40
-50 -60
Agriculture
10 Food, drink & tobacco
0 -35
-25
-15
-5
5
Motor vehicles
15
25
35
Misc. services
-10
Electrical & engineering Rubber & plastics
instruments
-20
-70
Manuf acture of f uels
Electronics
-80
-30
Change in Employment (2000 to 2005)
Change in Employme nt (2000 to 2005)
Source: Cambridge Econometrics Source: Cambridge Econometrics
•
Certain sectors are commonly found to be shrinker sectors when this analysis is undertaken. Particularly, labour intensive manufacturing or ‘old’ industrial sectors such as textiles and mining. This is demonstrated in the data for Cheshire & Warrington.
•
Concerning, however, is the decline in chemicals and water supply, which have high productivity levels and high location
•
Within the adjusting sectors, Cheshire & Warrington witnesses the rarity of a sector that has apparently increased its level of employment while simultaneously having a decrease in the overall GVA output. The sector in question, manufacture of fuels, has seen particular volatility over the five year time frame, which may be responsible for this anomalous result.
41
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Other sectors that have been adjusters in recent years include motor vehicles, distribution, and food & drink. Of these, motor vehicles is a particularly important sector in the sub-region, with a high location quotient.
Figure 3-31 Expanding sectors, Cheshire & Warrington, 2000 – 2005 (bubble size is proportional to GVA in 2005)
120 Banking & f inance
110
Of the sectors that have witnessed an expansion in recent years, a number require specific commentary:
Hotels and catering has expanded, but not dramatically, despite tourism being seen as a key sectors in the subregion Construction has seen strong GVA growth, suggesting increased activity by developers and confidence in the sector
100
Other business services
Basic metals
90
Retailing
80
Change in GVA (2000 to 2005)
•
Computing services
Pharmaceuticals
70 60
Professional services
Construction 50 40 Health & social w ork
Manufacturing nes.
Land transport
30 20
Electricity
10 0
A host of professional and business service sectors have seen growth, despite the concerns expressed with regard to the ‘pull’ of Manchester and Liverpool
Public sector service provision in health and education has also grown (though they are still under-represented)
The most significant increases in employment and GVA have been in computing services and pharmaceuticals17: high productivity sectors that are important to encourage. Pharmaceuticals was shown to be highly over-represented compared to the UK average in Figure 3-28 but, as an area of specialism for Cheshire & Warrington, the sector showed very high growth between 2000 and 2005.
-20
-10 Education
-10 -20
0
10 Hotels & catering
20
30
Wood & paper
40
50
60
70
80
Printing & publishing
-30
Change in Employment (2000 to 2005)
Source: Cambridge Econometrics
17
These figures will not reflect recently announced job-losses such as those at AstraZeneca.
42
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-33: Percentage point increase in the proportion of jobs in knowledgeintensive industries (OECD definition) in selected areas 2000 - 2005
Great Britain
Source: ABI employee analysis
The sectoral strengths of Cheshire & Warrington, in terms of the concentration of high-end manufacture, are also demonstrated in the proportions employed in Cheshire & Warrington in knowledge intensive businesses (KIBs). As shown in Figure 3-32, Cheshire & Warrington has a higher proportion of workplace based employment in KIBs compared to the North West and Great Britain.
Stockport
Chester
Vale Royal
Stafford
St Helens
Trafford
Wigan
Wirral
Congleton
2005
Oswestry
2004
Newcastle-under-Lyme
North West
2003
Warrington
2002
Manchester
2001
Stoke on Trent
2000
Liverpool
-8
Cheshire and Warrington
1999
Cheshire and Warrington
•
-6 Crewe and Nantwich
8 1998
•
-4
Halton
9
GB = -0.46
-2
Salford
10
0
Wrexham
11
2
Flintshire
12
4
Ellesmere Port and Neston
13
6
Staffordshire Moorlands
PP change in proportion of KIB employment, 2000-2005
Proportion of all in employement working in KIBs (%)
14
Macclesfield
Figure 3-32: Proportion of jobs in knowledge-intensive industries (OECD definition) for Cheshire & Warrington, North West and Great Britain
Source: ABI employee analysis
•
Such industries will generally require more highly qualified individuals, will employ people in more senior occupational classifications, and will pay higher wages to their staff.
Both Macclesfield and Ellesmere Port & Neston have seen a notable growth in KIBs – outperforming the Great Britain figure by a considerable degree (although the GB average actually dropped slightly over the timeframe shown using the OECD18 KIBs definition). Crewe & Nantwich and Warrington also performed well, while Chester and Vale Royal saw decreases in the proportion of employment in KIBs.
18
Organisation for Economic Co-operation and Development (OECD) defines knowledge intensive businesses (KIBs) as pharmaceuticals; office machinery and computers; aerospace; precision instruments; electrical engineering; telecommunications; financial intermediation; insurance and pension funding; activities auxiliary to financial intermediation; computer and related activities; R&D; other business activities; motion picture and video activities; and radio and television activities.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Occupational structure 19
Figure 3-35: Higher value occupations’ share of residents’ employment for Cheshire & Warrington, North West and Great Britain Higher value occupations' % share of employment
Proportion of employment in KIBs (%)
Figure 3-34: Proportion of jobs in knowledge-intensive industries (definition as used in Investing in Success) for Cheshire & Warrington, North West and Great Britain 32 31 30 29 28 27 26 25 24
50 48 46 44 42 40 38 36 34
23
Mar 2001-Feb 2002
22 1998
1999
2000
Cheshire and Warrington
2001
2002 North West
2003
2004
2005
Mar 2002-Feb 2003
Cheshire and Warrington
Mar 2003-Feb 2004
Apr 2004-Mar 2005
North West
Apr 2005-Mar 2006 Great Britain
Great Britain
Source: LFS and APS Source: ABI employee analysis
•
Investing in Success utilised a different definition of knowledge based industries to that of the OECD. Using this alternative definition, the performance of Cheshire & Warrington is again better than both the North West and Great Britain.
•
Note that, as with other data sets, sampling and classification errors tend to make the data more volatile for smaller geographies – we should be careful not to read too much into the year-on-year variations in Cheshire & Warrington in Figure 3-32 and Figure 3-34.
•
Cheshire & Warrington has witnessed an increase in the proportion of residents in higher end occupations. In 2005/06, the proportion of people in higher-end occupations in Cheshire & Warrington stood at 47.4% compared with 41.9% in Great Britain and 39.3% in the North West.
•
The gap between Cheshire & Warrington and both the North West and Great Britain appears to have been increasing over time, though the previous caveat re sampling errors for smaller geographies needs to be borne in mind.
19
Managers and senior officials; Professional occupations; and Associate professional and technical occupations
44
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Process, plant and machine operatives, elementary occupations
Halton
Stoke on Trent
Wigan
Salford
Flintshire
Wrexham
Liverpool
St Helens
Oswestry
Wirral
Manchester
Stafford
Warrington
Stockport
Newcastle-under-Lyme
Cheshire and Warrington
Crewe and Nantwich
North West
Staffordshire Moorlands
Great Britain
Cheshire and Warrington
0%
Chester
20%
Trafford
40%
Congleton
60%
Vale Royal
80%
140 130 120 110 100 90 80 70 60 50 Macclesfield
100%
Ellesmere Port and Neston
Figure 3-37: Indexed percentage point increase in the higher value occupations’ share of employment in selected areas 2001/02 to 2005/06) (GB=100) Growth in higher level occs as a % share of employment, 2001/02 - 2005/06 (GB=100)
Proportion of employment in each occupational group (%)
Figure 3-36: Proportion of employment in each occupational group, July 2005 – June 2006
Personal service, sales & customer service occupations Administrative & secretarial occupations, skilled trades Managers, professional, associate professional & technical Source: LFS and APS
•
Source: LFS and APS
•
Not only does Cheshire & Warrington as a whole have a greater proportion in higher-end occupations, but it has seen growth in that proportion over time at a greater rate than in Great Britain. Of the selected areas considered, Cheshire & Warrington districts hold the top four positions with again, growth highest in those districts known as having substantial outward commuting movements.
•
Growth within the districts has been lowest, and below the national level, in Crewe & Nantwich and Ellesmere Port & Neston, which both showed interesting migration dynamics. Considering the two points together, the suggestion is that those moving into these areas are generally entering lower-end occupational groupings.
Note, however, that this data is residence based, and indicates the occupational classification of Cheshire & Warrington residents. A significant proportion of employment in higher-end occupations will actually be working outside the sub-region, mainly in the regional centre of Manchester.
45
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Allowing for sampling error volatility, the median20 full time earnings in Cheshire have broadly followed the UK average, while those in Warrington have been at a somewhat lower level.
•
Workplace earnings
Figure 3-39: Indexed % increase in average (median) gross weekly earnings in selected areas 2002 - 2006 (UK=100) – workplace based 175 150
50
320 300 1998 Cheshire
1999
2000 Warrington
2001
2002
2003
North West
2004
2005
2006
Chester
Warrington
Congleton
Stoke on Trent
Wirral
Wigan
Wrexham
Oswestry
Vale Royal
Cheshire
Salford
Liverpool
Staffordshire Moorlands
340
Newcastle-under-Lyme
360
Macclesfield
380
St Helens
400
Manchester
420
Crewe and Nantwich
0
440
Stafford
25 Flintshire
Median Gross Weekly FT Earnings (£)
460
75
Stockport
480
100
Halton
Figure 3-38: Average (median) gross weekly full-time earnings Cheshire, Warrington, North West and Great Britain – workplace based
125
Trafford
% Change in Earnings 2002-2006 (UK=100)
Workplace earnings record the wages paid to people employed in Cheshire & Warrington. We have seen already that there is a degree of commuting out of Cheshire & Warrington, particularly from western parts of the sub-region, and hence, some of these earnings will ‘travel’ with commuters.
•
Ellesmere Port and Neston
Earnings
Source: ASHE
United Kingdom
• Source: ASHE
Considering individual districts, the median weekly full time earnings for those working in Ellesmere Port & Neston has grown substantially more than that for the UK over the period 2002-2006 – possibly accounted for to some extent by job losses in lower value added employment. There has been a minor increase in
20
The median average acts as an indicator of the ‘typical’ level of earnings – it better represents this than the mean average because it is less likely to be influenced by exceptionally high or low values within the range of earnings encountered.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
median earnings in Crewe & Nantwich, but all other districts have seen workplace earnings rise at a rate slower than the UK average.
Figure 3-41 Average (median) gross weekly part-time earnings for Cheshire, Warrington, North West and the UK – workplace based 150
Figure 3-40 Average (median) gross weekly full-time earnings Cheshire & Warrington districts, North West and Great Britain – workplace based Median Gross Weekly PT Earnings (£)
140
Median Gross Weekly Earnings (£)
575 550 525 500 475 450
130 120 110 100
425 400
90
375
1998
350 325
1999
Cheshire
300
2000
2001
Warrington
2002
2003
2004
North West
2005
2006
United Kingdom
Source: ASHE
275 1998
1999
2000
Chester Ellesmere Port and Neston Warrington
2001
2002
Congleton Macclesfield North West
2003
2004
2005
2006
Crew e and Nantw ich Vale Royal United Kingdom
Figure 3-42: Average (mean) gross weekly full-time earnings for Cheshire, Warrington, North West and the UK – workplace based
•
•
Ellesmere Port & Neston has the highest median workplace based earnings of all the Cheshire & Warrington districts. Earnings were close to £550 per week in 2006, compared to around £470 in Macclesfield, the next highest district. The lowest earnings figure in 2006 was found in Warrington with earnings of £385. However, this figure bucks a trend of growing earnings levels in Warrington and may be due to sampling errors. Of more concern are the figures for Chester which exhibits a trend of earnings reducing since 2003, and Vale Royal for which earnings appear to have been relatively flat since 2001.
Mean Gross Weekly FT Earnings (£)
550
Source: ASHE
500
450
400
350 1998 Cheshire
1999
2000
2001
Warrington
2002
2003
North West
2004
2005
2006
United Kingdom
Source: ASHE
47
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Residence based earnings Figure 3-44: Indexed % increase in average (median) gross weekly full-time earnings in selected areas 2002 - 2006 (UK=100) – residence based 200
380
Halton
Chester
Wigan
Vale Royal
Wirral
Wrexham
Cheshire
Congleton
Flintshire
Manchester
Stoke on Trent
Stafford
Stockport
Salford
Warrington
Trafford
Crewe and Nantwich
400
Staffordshire Moorlands
420
Oswestry
440
St Helens
460
Liverpool
0
480
Source: ASHE
360 2002 Cheshire
2003 Warrington
2004 North West
2005
2006 United Kingdom
•
Growth in median residence based earnings has been highest in Macclesfield, the district with the highest commuting flows, and in Ellesmere Port & Neston, a district with a high concentration of high-end manufacturing.
•
Cheshire overall has not witnessed earnings growth at the same level as the UK, largely due to the relatively low growth in residence based earnings in Chester and Crewe & Nantwich. We note that these are the districts recording the highest rate of NI registrations by non-UK nationals in 2005/06 – indicating perhaps that the influx of migrants from Eastern Europe may be suppressing wage inflation in these areas.
Source: ASHE
•
50
Macclesfield
Median Gross Weekly FT Earnings (£)
500
100
Newcastle-under-Lyme
Figure 3-43: Average (median) gross weekly full-time earnings per job in Cheshire, Warrington, North West and UK – residence based
150
Ellesmere Port and Neston
% Change in Earnings 2002-2006 (UK=100)
Residence based earnings data provides information on what people living in Cheshire & Warrington earn – independent of whether they are employed in Cheshire & Warrington. The variance between workplace and residence based earnings assists in gaining an understanding of commuting patterns.
•
The residence-based median weekly full time earnings in Cheshire are c. 10% above the UK average (whereas the workplace-based figures were broadly similar to the UK). This indicates that Cheshire’s out-commuters are typically earning significantly more than in-commuters: well qualified, high-earning people are taking advantage of Cheshire’s quality of life and are in the financial position to access the Cheshire & Warrington housing market.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
150
600
145 140 135 130 125 120 115 2002 Cheshire
2003 Warrington
2004 North West
2005
2006 United Kingdom
Source: ASHE
•
Figure 3-46 Average (mean) gross weekly earnings in Cheshire, Warrington, North West and Great Britain – residence based
Mean Gross Weekly FT Earnings (£)
Median Gross Weekly Earnings (£)
Figure 3-45 Average (median) gross weekly part-time earnings in Cheshire, Warrington, North West and Great Britain – residence based
Part-time earnings in Cheshire & Warrington are above the North West and UK figures generally, although the difference is not especially significant. The figures are also similar to the workplace earnings data, reflecting that fact that people are unlikely to travel far for part-time employment.
580 560 540 520 500 480 460 440 420 2002 Cheshire
2003 Warrington
2004 North West
2005
2006 United Kingdom
Source: ASHE
•
As with the median, the mean residence-based earnings in Cheshire have been comfortably and consistently above the regional and national figures.
49
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
high utilisation of ICT (communications, business services, computing services).
Productivity performance Figure 3-47: GVA per job for North West NUTS2 areas 1998 – 2004
Figure 3-48: Productivity and GVA change by sector, 2000-2005 (bubble size is proportional to GVA in 2005)
45,000
35,000
30,000
25,000
20,000 1998
1999 Cumbria Lancashire
2000
2001 Cheshire Merseyside
2002
2003
2004
Greater Manchester
Percentage Change in GVA, 2000-2005
GVA output per ABI Job (£)
140
40,000 Banking & Finance
120
Pharmeceuticals
Retailing Basic Metals Construction
Prof . Services 100 Health & Social Work
Manuf . nes Electricity
80 Hotels & Catering
Communications 60
Land Transport, etc
Distribution
40 Wood & Paper Metal Goods
Source: ONS, ABI
Computing Other Bus. Services Services
A griculture
20
Education
•
•
Headline measures of productivity (GVA per ABI worker) shows that the Cheshire & Warrington economy is more productive than its sub-regional neighbours within the North West. NWDA has placed a strategic importance on closing the region’s productivity gap and the continuing strong performance of Cheshire & Warrington is likely to support this objective. When publishing the Regional Economic Strategy in 2006, the NWDA estimated that £10 billion of the £13 billion GVA gap was the result of lower productivity in the region. Figure 3-48 illustrates the change in both GVA and productivity, by sector. Productivity increases have been witnessed in the majority of sectors, particularly service sectors and those with
Printing & Publishing -80
0 -60
-40
-20 Other Mining
Public Admin. & Def ence
0
20
40
Motor V echicles Misc. Services -40
Elec Eng. & Instrum.
80
-20
Chemicals
Manuf acturing Fuels
60
Rubber & Plastics
Food Drink & Tob. Water Insurance Supply
-60
Mech Engineering
Non-Met Min. Products Text. Cloth. & Leather
Percentage Change in Productivity, 2000-2005
Source: Cambridge Econometrics
•
Pharmaceuticals has seen a notable increase in productivity but the manufacturing of fuels, a sector seen in the bottom quadrant of Figure 3-30, apparently saw a decrease over the 2000-2005 period a decrease in recent years.
50
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Computing services also witnessed a considerable rise in productivity, most likely due to improvements in ICT and increased take-up of ICT within the sector itself and in other sectors to which computing service are suppliers.
•
Many sectors that were shown to be adjusters and expanders in Figure 3-30 and Figure 3-31 are also shown as having productivity gains in the last five years. For adjusters, increases in GVA per sector while being able to shed jobs, indicates better productivity. The same can be true for expanding sectors where the increases in GVA can be disproportionate to the increases in employment – despite jobs being created, each worker is more productive.
The GVA imperative •
•
The Government is pushing for regional, sub-regional and local economies to increase their GVA output by improving productivity. HM Treasury has identified a number of ‘productivity drivers’:
skills
investment
competition
innovation
enterprise
We consider each of these productivity drivers in the following sub-sections.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
22
Wrexham
Oswestry
Salford
Chester
Wigan
Liverpool
Wirral
Stoke on Trent
Halton
Trafford
St Helens
Manchester
Stockport
Warrington
Source: LFS and APS
20 18 Mar 1999Feb 2000
Mar 2000Feb 2001
Cheshire and Warrington
Mar 2001Feb 2002
Mar 2002Feb 2003 North West
Mar 2003Feb 2004
Jan 2005Dec 2005 Great Britain
Source: LFS and APS
•
Crewe and Nantwich
24
Newcastle-under-Lyme
26
Cheshire and Warrington
28
Stafford
30
Staffordshire Moorlands
Congleton
% of WAP with NVQ4+
32
Flintshire
34
GB = 3.2
Ellesmere Port and Neston
Figure 3-49: Proportion of working age population with NVQ4+ for Cheshire & Warrington, North West and UK
14 12 10 8 6 4 2 0 -2 -4 Macclesfield
Qualifications
Vale Royal
PP change in proportion of WAP with NVQ 4+
Figure 3-50: Percentage point increase in the proportion of working age population with NVQ4+ in selected areas 2000 - 2005
Productivity driver: skills
High skill levels are recognised as one of the key drivers of productivity within an economy. In 2005, 31.4% of the WAP in Cheshire & Warrington were qualified to level NVQ4 or above compared to 26.5% nationally. The chart above shows that in Cheshire & Warrington, the proportion of the WAP possessing higher level skills (NVQ4+) has consistently been much higher than in both Great Britain and the North West region since 1999. Furthermore, it appears that this gap has increased over recent years.
•
Five districts within Cheshire & Warrington have experienced a growth in the proportion of the WAP with NVQ4+ qualifications above the growth experienced nationally (3.2pp between 2000 and 2005). Strong growth occurred in Congleton, Vale Royal and Macclesfield. However, in Chester and Crewe & Nantwich there has actually been a decline since 2000 in the proportion of the WAP with NVQ4+.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Mar 1999Feb 2000
Mar 2000Feb 2001
Mar 2001Feb 2002
Mar 2002Feb 2003
Mar 2003Feb 2004
Jan 2005Dec 2005
pp change 20002005
Great Britain
22.5
23.3
23.6
24.2
25.2
26.5
3.2
North West
19.6
21.2
21.1
21.4
23.1
24.2
3.0
Cheshire & Warrington
26.9
26.4
27.2
27.5
30.3
31.4
5.0
Area
Greater Manchester
18.7
21.1
21.1
21.4
22.8
23.2
2.1
Merseyside
17.6
18.7
19.1
19
19.3
21.2
2.5
Cumbria
16.6
19.6
18.6
19.1
23.1
23.2
3.6
20
21.4
20
20.6
23.1
24.8
3.4
Lancashire Source: LFS and APS
•
Liverpool and Manchester have been acknowledged as growth centres within the regional economy with both using their Universities as mechanisms to retain qualified people (graduates) and encouraging higher-end business. Despite this, the proportion of the WAP with Level 4+ qualifications has grown at a slower rate in these sub-regions than it has in the North West as a whole – while in Cheshire & Warrington, the growth has been two percentage points higher than regionally over the period.
•
The previous discussion of workplace-based vs residence-based earnings would suggest that Cheshire & Warrington’s strong performance in NVQ4+ skills levels is, to some extent, a reflection of a growth in highly qualified, well-paid commuters – living in the sub-region but working in Greater Manchester or Merseyside.
Figure 3-51: Proportion of working age population with NVQ2+ and NVQ 3+ for Cheshire & Warrington, North West and UK % of WAP with NVQ2+ and NVQ 3+
Table 3-14 Percentage of WAP with NVQ4+ - North West sub-regions
75
NVQ 2+ 65
55
NVQ 3+ 45
35 Mar 1999-Feb Mar 2000-Feb Mar 2001-Feb Mar 2002-Feb Mar 2003-Feb Jan 2005-Dec 2000 2001 2002 2003 2004 2005 Cheshire and Warrington
North West
Great Britain
Source: LFS and APS
•
Growth in the proportion of the WAP with NVQ2+ and NVQ3+ qualifications demonstrate similar patterns to one another and are displayed together in Figure 3-51. The proportion with NVQ3+ has shown a trend of growing slightly quicker than regionally and nationally since 2003, primarily due to the increase of NVQ4+ groups in Cheshire & Warrington.
53
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-52: Proportion of working age population with NVQ1+ for Cheshire & Warrington, North West and UK
•
Cheshire & Warrington also performs well when looking at the proportions of WAP with lower or no qualifications. In 2005, only 13% of the WAP in the sub-region had no qualifications, compared to 14.3% in Great Britain and 17.0% in the North West.
•
Over the 1999-2005 period shown, all districts but Chester witnessed a decrease in the proportion with no qualifications, with the increase in Chester being just 0.8 pp.
% of WAP with NVQ 1+
84 82 80 78 76 74 72 70 Mar 1999Feb 2000
Mar 2000Feb 2001
Mar 2001Feb 2002
Cheshire and Warrington
Mar 2002Feb 2003
Mar 2003Feb 2004
North West
Jan 2005Dec 2005 Great Britain
Source: LFS and APS
Figure 3-53: Proportion of working age population with no qualifications for 21 Cheshire & Warrington, North West and UK % of WAP with no qualifications
20 19 18 17 16 15 14 13 12 Mar 1999Feb 2000
Mar 2000Feb 2001
Cheshire and Warrington
Mar 2001Feb 2002
Mar 2002Feb 2003 North West
Mar 2003Feb 2004
Jan 2005Dec 2005 Great Britain
Source: LFS and APS 21
In addition to no qualifications, a proportion of the WAP will often have other qualifications not corresponding to NVQ Levels. This group is not shown and accounts for why the NVQ 1+ group added to the no qualification group does not equal 100%.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
% of 15 yr old pupils achieving 5+ A*- Cs
Figure 3-54: Proportion of 15-year old pupils achieving 5+ A*-C GCSEs for Cheshire & Warrington, North West and UK
•
GCSE attainment levels in Cheshire & Warrington (the first step on the skills escalator in terms of qualifications) are above both the regional and national levels. In 2004/05, 14.2% more 15-year olds achieved 5+ A*-C GCSE qualifications than nationally, and 16.3% more than in the North West. Only in Ellesmere Port & Neston within Cheshire & Warrington are attainment levels below the English average.
•
This is a clear selling point for the sub-region given that residential choice is often driven by access to good education – indeed, education was one of the indicators used to construct the Halifax QofL index (see earlier section). Relative to neighbouring authorities, only Trafford and Staffordshire Moorlands outperform the Cheshire & Warrington figure.
65
60
55
50
45 2001/02
2002/03
2003/04
Cheshire & Warrington
2004/05
North West
England
Source: Neighbourhood Statistics
Figure 3-55: Indexed proportion of 15-year old pupils achieving 5+ A*-C GCSEs for selected areas in 2005 (UK=100)
120 110 100 90
Salford
Manchester
Stoke-on-Trent
Liverpool
Halton
Wigan
Stockport
Newcastle-under-Lyme
Wirral
St. Helens
Crewe and Nantwich
Chester
Stafford
Oswestry
Warrington
Cheshire & Warrington
Vale Royal
Staffordshire Moorlands
Congleton
Macclesfield
70
Ellesmere Port & Neston
80
Trafford
% of 15 yr old pupils achieving 5+ A*-Cs 2005 (England = 100)
130
Source: Neighbourhood Statistics
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
NEETs
Percentage of 16 -18 year olds not in education, employment or training (NEET)
Figure 3 -56: Percentage of 16-18 year olds not in employment, education or training for selected Connexions Partnerships and for England
Figure 3-57: Situation of 16-18 year olds in March 2007 in Cheshire & Warrington
14.0% 12.0%
NEET (5.2%)
10.0%
Not available to the labour market (1.0%)
Current situation unknown (2.8% )
Available to the labour market (4.2%)
8.0% 6.0% 4.0%
Training (1.4%)
2.0% 0.0% Cheshire & Warrington
Cumbria
Nov-02
Greater Manchester
Greater Merseyside Nov-04
Lancashire
England
Nov-05
In employment (21.9%)
Source: Connexions (national)
•
In England the proportion of NEETs (those aged 16 to 18 not in education, employment or training) declined slightly between 2002 and 2005. Such a decline was also featured in all of the subregions in the North West except Cheshire & Warrington where there appeared to be a slight increase between 2004 and 2005.
•
Nonetheless, NEET figures in Cheshire & Warrington have been well below the England rate and below those of other North West 3.1 sub-regions (though Cumbria had marginally better figures in 2005 than Cheshire & Warrington).
•
More recent data (2007) for Cheshire & Warrington shows that, of all of those aged between 16 and 18 in Cheshire & Warrington c. 92% were in education, training or employment and only c. 5% were classified as NEETs.
In education (68.2%)
Source: Connexions Cheshire & Warrington
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Skills gaps
•
The distribution of skills gaps in Cheshire & Warrington is concentrated in those occupations requiring lower skills22. Consumer handling and team working skills were areas of concern on a national and regional level and worryingly, cited more frequently by businesses located in Cheshire & Warrington.
•
Of those businesses with vacancies, those in Cheshire & Warrington were more likely to feel that those vacancies were hard to fill because of skills shortages than in England, the North West and the other North West sub-regions.
25 20 15 10 5
2% 1%
er se ys id e M
ste r G
re at er
an ch e
re at er M
Cu m br
La nc as hi re G
&
ia
0%
he sh ir e
In 2005, of all the businesses that cited skills deficiencies, the technical, practical and job-specific skills were of a particular concern to employers. In Cheshire & Warrington 58.5% of these businesses flagged these skills deficits as being significant (vs 49.5% in England).
3%
C
•
Over the 2003-2005 period, the number of employers reporting skills gaps has shown a steady decline at both the national and regional scale. Cheshire & Warrington compares favourably with England and the North West with fewer skills gaps reported in 2005.
4%
Al lE
•
5%
ng to n
Source: NESS
6%
W ar ri
England
W es t
North West
2005
or th
Cheshire and Warrington
2004
N
2003
Figure 3-59 Proportion of establishments with vacancies which have hard to fill vacancies due to skills shortage
ng lan d
0
Proportion of establishments with SSVs
skills gaps (%)
Proportion of employers reporting
Figure 3 -58: Proportion of employers reporting skills gaps in Cheshire & Warrington, North West and England
Source: NESS
22
Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 26-7.
57
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Construction activity
Productivity driver: investment
Table 3-16 Value of new construction orders (over £25,000) in 2000 and 2006, and change (indexed to 2006 prices using ONS CPI inflation rates)
Gross fixed capital formation Table 3-15 Gross Fixed Capital Formation (2000)
GFCF (£million) United Kingdom North West
GFCF per 10,000 population (£million)
158,918
GFCF (as a % of the UK) 100
Cheshire (NUTS2) Chester
474
745
57
66
81
22
50
46
-7
Crewe & Nantwich
84
103
22
Ellesmere Port & Neston
21
54
154
Halton
33
85
159
Macclesfield
84
132
57
3.6
Vale Royal
37
58
55
16.2
1.5
Warrington Source: DTI and ONS
98
186
90
15.3
1.5
21.6
9.5
Cheshire
2,875
32.8
1.8
Cumbria
1,685
33.7
1.1
Greater Manchester
5,625
22.1
Lancashire
2,335
Merseyside
2,277
•
Table 3-16 shows the total value of construction projects in the Cheshire NUTS2 area and provides an indication of change in development activity. Time-series data is shown in Figure 3-60.
•
Changes over time have been relatively flat in most districts with notable exceptions being Crewe & Nantwich, Chester, and Warrington where, in individual years, there have been some pronounced jumps. In Warrington, in 2003, the value of new construction was three times higher than in 2000.
Source: ONS
•
All New Work 2006 (£m)
Congleton
14,796
•
All New Work 2000 (£m)
% change 2000 – 2006
Up to 2000 the Government recorded gross fixed capital investments by NUTS2 sub-regions. This data source has not been updated but ABI2 investment data acquired for this study is considered in the ‘competition’ element of this report, later in this section. In 2000, levels of gross fixed capital formation were highest in Cheshire and Cumbria amongst North West NUTS2 sub-regions. The likely explanation for this is the high capital intensities of particular industries in those locations (nuclear in Cumbria and pharmaceuticals in Cheshire & Warrington).
58
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-60 Value of new construction, indexed to 2006 prices
23
•
Overall, Cheshire & Warrington has seen reductions in the amount of previously developed (brownfield) land within the area. The most notable decrease has been in Ellesmere Port & Neston, where over one quarter of all previously developed land was brought back into use between 2002 and 2005.
•
The highest concentrations of previously developed land remain in Warrington and Vale Royal.
Value of new Construction Orders (£m)
400 350 300 250 200 150 100
Figure 3-61 Previously developed land, hectares, 2002 to 2005 50 0 2001
2002
Chester Ellesmere Port & Neston Vale Royal
2003
2004
Congleton Halton Warrington
2005
2006
Crew e and Nantw ich Macclesfield
Source: DTI and ONS
Previously developed land Table 3-17 Previously developed land hectares, 2002 to 2005 2002
2005
change
Chester
172
119
-53.4
Congleton
121
107
-14.4
48
39
-9.6
Ellesmere Port & Neston
396
271
-125.7
Macclesfield (outside NP)
57
55
-2.8
Vale Royal
693
607
-86.5
Warrington UA
704
661
-43.3
Crewe & Nantwich
Previously Developed Land (hectares)
2000
800 700 600 500 400 300 200 100 0 2002 Chester Ellesmere Port & Neston Warrington UA
2003 2004 Congleton Macclesfield (outside NP)
2005 Crew e and Nantw ich Vale Royal
Source: DCLG
Source: DCLG 23
SQW used ONS CPI data to index to 2006.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Productivity driver: competition
Figure 3-63: Average GVA per employee for foreign-owned firms and UK-owned firms for Cheshire & Warrington, North West and UK 2000 to 2004
Figure 3-62: Proportion of employment in foreign-owned firms for Cheshire & Warrington, North West and UK 2000 to 2004 Average GVA per employee
65
Percentage of total employment in foreign owned firms
16
14
12
10
8 2000 UK
60 55 50 45 40 35 30 25 20 2000
2001
2002 North West
2003 2004 Cheshire and Warrington
2001 UK f irms in UK UK f irms in North West UK f irms in Cheshire and Warrington
2002
2003
2004
Foreign firms in UK Foreign firms in North West Foreign firms in Cheshire and Warrington
Source: ONS ABI2
Source: ONS ABI2
•
•
Data on the levels of competition faced by businesses in Cheshire & Warrington is not readily available. One proxy measure, however, is the proportion of employment in foreign-owned businesses (which, by definition, are owned by groups operating in international markets). The proportion of employment in foreign-owned firms has shown substantial growth – from 10% in 2000 to 15% in 2004; this is broadly in line with the national average, but has been consistently rather higher than the North West average (13% in 2004).
•
Strikingly in the UK, North West and Cheshire & Warrington areas GVA per employee is almost always higher in foreign owned firms than those owned domestically.
•
However, interestingly, the average GVA per employee of foreign-owned firms in Cheshire & Warrington and the North West appears to have decreased over the period 2000-2004 – in contrast to the growth in productivity for foreign-owned firms in the UK as a whole.
•
It is possible that this could be a result of sampling/data errors or large individual acquisitions/disposals/restructuring, or both. With an increasing proportion of Cheshire & Warrington employment in foreign-owned firms, this is potentially worth further investigation.
60
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
The variation observed in Cheshire & Warrington may be attributable to the comparatively small number of foreign owned firms located in the area. Thus the relocation of a small number of firms may have a large impact on the indicators.
•
Those sectors contributing to the high levels of productivity in Cheshire & Warrington included electricity, gas and water supply and manufacturing. Warrington, throughout the period, has had highly productive domestic and foreign owned firms in the construction and transportation sectors.
Figure 3-64: Average GVA per employee in foreign owned firms in Cheshire & Warrington 2000 to 2004 74 GVA per employee (£000's)
69 64
•
The decline of the GVA per employee in the manufacturing sector between 2002 and 2003 in Cheshire was the main contributor to the overall productivity drop observed at the Cheshire & Warrington level. However, GVA per employee did rise in the year to 2004 which was attributable to a slight recovery in the manufacturing sector and productivity gains in the real estate, renting and business activity sector.
•
Warrington accounts for about a third of foreign-owned business sites in the sub-region. Warrington’s lower GVA per employee between 2000 and 2002 was mainly due to a lower productivity performance in the manufacturing sectors. However, the construction and transport, storage and communication sectors have been the strongest performing sectors in terms of GVA per employee through the four years to 2004.
59 54 49 44 39 34 29 24 2000
2001 Cheshire
2002
2003 Warrington
2004
Source: ONS ABI2
•
GVA per employee in foreign-owned firms declined in both Cheshire & Warrington from 2000 to 2004, with the decline most pronounced in Cheshire.
61
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA Figure 3-65 Percentage of capital expenditure accounted for by foreign owned firms 2000 to 2004
Figure 3-66 Capital expenditure per employee in Cheshire & Warrington 2000 to 2004
Capex per employee (£000's)
Proportion of capex accounted for by foreign owned firms
25 23 21 19 17 15 13 11 9 5 2001 North West
7.1 6.1 5.1 4.1 3.1 2000 2001 UK firms in UK UK firms in North West UK firms in Cheshire and Warrington
7 2000 UK
8.1
2002 2003 2004 Cheshire and Warrington
2002
2003 2004 Foreign firms in UK Foreign firms in North West Foreign firms in Cheshire and Warrington
Source: ONS ABI2 Source: ONS ABI2
•
The proportion of capital expenditure accounted for by foreign owned firms across the UK has fluctuated around 20%, the North West region has followed a similar trend but at a lower level of around 12%.
•
In contrast, the trend in Cheshire & Warrington has been for foreign-owned business sites to account for a rapidly growing share of capital expenditure since 2000. This is due to strong investment growth in the foreign-owned real estate, renting and business activity sector, which increased its total net capital expenditure more than three fold between 2000 and 2004.
•
While capital expenditure per employee has remained roughly consistent over time in domestically owned firms this is not the case for foreign-owned firms. In Cheshire & Warrington there has been strong growth in capital expenditure per employee, such that by 2004 foreign firms, on average, spent £3,500 more per employee than domestic firms. In contrast, UK-level capital expenditure per employee by foreign-owned firms has followed a downward trend, although it remains significantly higher than that of domestic firms in the UK. We would suggest that the dynamics of inward investment in Cheshire & Warrington would be worth exploring in more detail, given the increasing proportion of employment in foreign-owned firms, and the apparently rather dramatic changes in investment levels and GVA per employee.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Productivity driver: innovation
Figure 3-68: ADSL broadband take-up in Cheshire & Warrington, the North West and the UK
Figure 3-67: Proportion of firms using IT systems, by North West sub-region
30.0 Broadband take-up (BT data)
35.0
Computer system usage by businesses across the region (%)
Exploitation of ICT
80 78 76 74 72 70
20.0 15.0 10.0 5.0
68 0.0
66
2003
64
Cheshire & Warrington
Cumbria
Greater Manchester
Lancashire
Merseyside
London
North West
UK
62 Cheshire & Warrington
Greater Greater Merseyside Manchester
North West
Cumbria
Lancashire
Source: NWDA
•
The exploitation of ICT has been one of the main drivers of productivity gains internationally over recent years. Indeed the European Commission has estimated that ICT accounted for almost half of EU productivity growth in recent years.
•
Research undertaken in 2004 by the NWDA24 showed that businesses in Cheshire & Warrington were more likely to use IT systems than businesses in the other North West sub-regions. 79% of businesses were utilising IT systems compared to just 74% in the North West overall.
24
25.0
NWDA/Regional Intelligence Unit (RIU) project entitled - Benchmarking ICT and ECommerce and its Progress Across the Region, 2004.
2004
2005
2006
Source: BT
•
Take up of ADSL broadband in Cheshire & Warrington has also been shown to be higher than in the other North West sub-regions and also higher than the UK average. Some caution needs to be used when interpreting this, since the above chart illustrates BT’s volumes, rather than total market volumes. It is likely that BT faces more intense competition from cable and other operators in Greater Manchester, Merseyside and London.
•
Whole-market broadband estimates from Point Topic put Cheshire at 42% penetration in 2006 – 13th out of 34 English counties (the range is 31% to 56%). This suggests a reasonably high level of take-up, which should result in productivity benefits to the subregion’s businesses over the next few years.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Research and development
•
As part of the development of Investing in Success the R&D resource base of Cheshire & Warrington was identified as being a considerable asset to the sub-region and this continues to be the case – however, recent research has shown AstraZeneca is one of the most significant contributors to North West R&D activity and, as their sites are in Cheshire & Warrington, it is likely that the sub-region’s R&D statistics are skewed by this single (global) business.
•
In 2006, AstraZeneca commissioned a study into the economic benefits of AstraZeneca to the UK economy. The study concluded that R&D spend by AstraZeneca was responsible for one pound in every three spent by businesses on R&D within the North West. Given that total R&D spend by businesses within the North West in 2003 (based on ONS data) was £1,500m this would suggest that AstraZeneca accounted for c. £500m of R&D spend.
•
The actual data released by AstraZeneca suggests a contribution of around £570m. Deducting this from the North West and Cheshire & Warrington expenditure on R&D as produced by ONS implies that R&D spend per adult in Cheshire & Warrington (excluding AstraZeneca) is £106, versus £18725 in the North West.
•
Clearly, and due to the nature of the analysis – the ONS figures are top-down based on nationally collated figures while the AstraZeneca study used their internal information sources – it is difficult to exactly relate the two sources of data to provide R&D spend per adult excluding the impact of AstraZeneca for Cheshire
Figure 3-69: R&D expenditure per adult for Cheshire & Warrington, North West and UK
R&D expenditure per head of adult (16+) population (£)
873 773 673 573 473 373 273 173 73 1997
1998
1999
2000
2001
2002
2003
Year Cheshire and W arrington NUTS2
North W est
UK
Source: ONS (provided by Cheshire County Council)
•
R&D investment per adult is a new indicator being developed by ONS. The data is therefore exploratory, but it does give an overall indication of R&D activity.
•
Cheshire & Warrington performs well against the North West and UK. Spend per head in Cheshire & Warrington in 2003 was £756 compared with just £273 in the North West overall. Indeed, based on the ONS data, Cheshire & Warrington contributes 39% of the region’s spending on R&D.
25
Comparison with the UK is not made as the population figures used to calculate the adult population at the level of the UK are not available from the same source data-set.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
& Warrington and the North West. Indicatively however, the analysis suggests that without AstraZeneca, spend per adult would be much closer, if not lower, than the regional average. •
Traditional R&D statistics are rather poor indicators of innovation levels in modern economies (especially given that they fail to capture much ICT-related innovation going on in service industries, such as financial services). Furthermore, at a subregional level, the bulk of the economic benefits of large corporate R&D activity will accrue to operations outside the area. However, the above analysis does suggest that Cheshire & Warrington cannot afford to be complacent on the ‘innovation’ driver of productivity.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
40 35 2000
2001
Cheshire and Warrington
2002
2003
North West
2004
2005
Manchester
Trafford
Vale Royal
Oswestry
Newcastle-under-Lyme
Stockport
Crewe and Nantwich
Wrexham
Wirral
Staffordshire Moorlands
Congleton
Liverpool
Stoke on Trent
Cheshire and Warrington
Wigan
Stafford
•
Chester, Warrington and Macclesfield performed particularly well compared to the rest of the UK and relevant comparator areas such as Manchester and Stockport. Chester’s performance was four times greater that observed on average across the United Kingdom.
•
Vale Royal is the only Cheshire & Warrington district in which the net change in VAT registered businesses was not above the level for Great Britain.
Great Britain
Source: NOMIS VAT registrations and LFS/APS
•
Flintshire
Source: NOMIS VAT registrations and LFS/APS
1999
•
Ellesmere Port and Neston
45
Macclesfield
50
Salford
55
Warrington
VAT registrations per 10k WAP
60
St Helens
Figure 3-70: VAT registrations per 10k working age population for Cheshire & Warrington, North West and UK
600 500 400 300 200 100 0 -100 -200 -300
Halton
VAT registrations
Chester
Change in VAT stock per 10k WAP 2000-2005 (GB=100)
Figure 3-71: Indexed net change in VAT stock per 10k working age population for selected areas 2000 - 2005 (UK=100)
Productivity driver: enterprise
From 2000 to 2005 Cheshire & Warrington consistently out performed the North West and Great Britain in terms of VAT registrations per 10,000 of the working age population. The absolute number of VAT registrations declined in Cheshire & Warrington between 2003 and 2005, a reflection of the trend observed at national and regional levels. However, it is encouraging to note that this decline was less pronounced than in Great Britain and the North West.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Survival rates Figure 3-73: One-year and Three-year survival rates for Cheshire & Warrington, North West and UK
125 120
100
115 95
110
90 Survival Rates (%)
Change in total stocks (1994=100)
Figure 3-72 Cumulative net change in VAT-registered business stocks 1994 - 2005
105 100 95 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Cheshire and Warrington
North West
Great Britain
One-year survival rates
85 80 75 70
Three-year survival rates
65
Source: NOMIS VAT registrations
60 1995
•
•
The number of businesses in Cheshire & Warrington has been increasing since 1994. Performance was consistent with that observed in Great Britain until 2000, at which point the business population proceeded to expand at a greater rate in Cheshire & Warrington. Performance was notably better than in the North West, which actually witnessed a decline in the stock between 1994 and 1996 – suggesting that the North West suffered from a ‘lag’ in recovering from the economic difficulties felt by the UK as a whole in the early 1990s.
1996
1997
Cheshire County
1998
1999
Warrington UA
2000
2001
2002
North West
2003
2004
2005
United Kingdom
Source: Small Business Service
•
From 1995 to 2005 there has been a 5pp rise in the one-year survival rate of business in the United Kingdom. Survival rates in the North West were lower than those in the United Kingdom between 1995 and 2003. However, since 2003 the North West survival rates have been in line with those of the UK.
•
The percentage of businesses surviving for one year in Cheshire has broadly followed the national average, but the three year survival rate has been somewhat higher than the UK’s, and substantially higher than that for the North West. Warrington, by contrast, has been broadly in line with the regional survival rates for both one-year and three-year statistics – i.e. somewhat lower than the national average, until recently.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Self-employment
Figure 3-75: Indexed proportion of working age population who are self employed in 2005 for selected areas (GB=100)
Figure 3-74: Proportion of those in employment who are self employed for Cheshire & Warrington, North West and UK
Cheshire and Warrington
2001
2002
2003
North West
2004
2005 Great Britain
Source: LFS and APS
•
Incidence of self employment in Great Britain has been steadily increasing from 2000 to 2005, such that in 2005 12.4% of those in employment were self employed. The North West has followed a similar trend, but at a rather lower level (11% in 2005).
•
In Cheshire & Warrington, sampling errors make the data much more volatile, but recent levels of self-employment appear to have been somewhere between the national and regional averages.
Halton
Stoke on Trent
Salford
Wrexham
Wigan
Liverpool
St Helens
Stafford
Warrington
Wirral
Vale Royal
Flintshire
Congleton
Manchester
Ellesmere Port and Neston
2000
Newcastle-under-Lyme
1999
Crewe and Nantwich
10
30 Cheshire and Warrington
10.5
50
Trafford
11
70
Stockport
11.5
90
Chester
12
110
Oswestry
12.5
130
Macclesfield
Proportion of those in employment who are self-employed
13
Staffordshire Moorlands
Proportion of those who are in employment who are self-employed (GB=100)
150
Source: LFS and APS
•
In 2005, the majority of districts in Cheshire & Warrington had self employment levels below those observed nationally. Ellesmere Port & Neston is a particular concern as the proportion who are self-employed has gone down.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Employer size
2000
2001
2002
2003
North W est
2004
2005
Great Britain
Congleton
Oswestry
St Helens
Wirral
Vale Royal
Wigan
Stockport
Wrexham
Halton
Macclesfield
Flintshire
Chester
Trafford
Staffordshire Moorlands
1999
Newcastle-under-Lyme
1998
Cheshire and W arrington
Cheshire and Warrington
28
Stoke on Trent
29
Salford
Liverpool
30
Stafford
31
Warrington
32
Crewe and Nantwich
33
150 140 130 120 110 100 90 80 70 60 50 Manchester
Proportion of employment in 200+ workplaces (%)
34
Ellesmere Port and Neston
Figure 3-77: Indexed proportion of employment that is in 200+ employee workplaces for selected areas, 2005 (UK=100) Proportion of employment in 200+ workplaces, 2005 (GB=100)
Figure 3-76: Proportion of employment that is in 200+ employee workplaces, for Cheshire & Warrington, North West and UK
Source: ABI workplace analysis Source: ABI workplace analysis
•
Recent research has suggested that productivity is generally higher in the largest businesses (those employing 200+). It is therefore worth considering the sub-region’s industrial structure in terms of employer size.
•
Since 2001 the percentage of those employed in 200 plus employee workplaces has been rising at both regional and national levels. These large employers are somewhat more prevalent in the North West than in Great Britain, but the difference is not particularly significant (up to 1pp). Allowing for data volatility caused by sampling errors, Cheshire & Warrington appears to be broadly in line with the regional average.
•
Warrington and Crewe & Nantwich are among those districts with the highest proportion of employees in 200+ businesses. Congleton has the lowest proportion of such employment, and Vale Royal, Ellesmere Port & Neston and Macclesfield also have lower prevalence of large employers than the national average.
69
Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
& Nantwich (becoming much more dependent on large employers) and Ellesmere Port & Neston (becoming much less dependent on large employers).
Table 3-18 Proportion of employment in size-band of business sites 1 to 10
11 to 49
50 to 199
200+
1998
2005
1998
2005
1998
2005
1998
2005
Great Britain
21.5
20.6
24.9
24.9
23.4
23.9
30.2
30.6
North West
20.8
19.7
25.8
25.1
23.2
24.0
30.3
31.2
Cheshire & Warrington
21.9
20.3
25.1
25.1
23.3
23.3
29.8
31.3
Chester
21.1
18.8
26.6
24.7
24.9
23.8
27.4
32.8
Congleton
26.8
28.0
24.8
28.2
24.7
25.4
23.6
18.3
Crewe & Nantwich
23.8
17.8
29.2
25.1
20.2
21.5
26.8
35.6
Ellesmere Port & Neston
16.4
18.4
24.4
29.2
20.1
24.3
39.1
28.1
Macclesfield
26.5
25.2
24.5
24.5
21.0
21.5
28.0
28.8
Vale Royal
24.3
23.4
26.8
27.8
24.9
23.8
24.0
25.1
Warrington
17.3
15.8
22.7
22.6
25.0
24.1
35.0
37.5
•
Finally we note that, although the largest businesses may generally have the highest levels of productivity, having a high volume of 200+ businesses can also leave a local economy exposed to shocks from individual employers/sectors. Our review of Cheshire & Warrington’s industrial structure suggests that the sub-region as a whole is not particularly exposed on this measure.
Source: ABI workplace analysis
•
There are some marked differences in the sizes of firms within Cheshire & Warrington. The proportion of employment in 200+ employee business sites ranges from 18% in Congleton to 38% in Warrington, while the proportion in 1-10 employee sites ranges from 16% in Warrington to 28% in Congleton.
•
Looking at the changes between 1998 and 2005, the changes in industrial structure have been particularly pronounced for Crewe
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Deprivation
Figure 3-78: Overall IMD 2004 score by super output area in Cheshire & Warrington
Index of multiple deprivation •
Those locations suffering from the highest levels of deprivation are concentrated in and around urban areas with populations in excess of 50,000, notably Ellesmere Port, Crewe, Warrington and also pockets around Chester. These urban centres also had the highest levels, in 2006, of lone parents claiming IB, under 25s claiming JSA and WAP with no qualifications26.
•
The rural areas of Cheshire & Warrington compare favourably in comparison to urban areas with SOAs ranking within the 50 and 100 percent interval of the most deprived in England according to IMD 2004 (i.e. in the least deprived half of SOAs). However, the rural area surrounding Knutsford represents an exception to this, with a pocket in the 40 to 50 percent of the most deprived relative to England.
•
Macclesfield and the surrounding countryside is an area of little deprivation where many SOAs compare favourably with the rest of England. This is a reflection of the fact that, in 2006, fewer than five percent of the population in Macclesfield and Congleton were claiming JSA or IB/SDA compared to in excess of eight percent in Ellesmere Port and Crewe27.
26
Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 26-7. 27 Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 26-7.
Source: DCLG, mapping undertaken by SQW under crown copyright
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
education
housing
overall
income
employment
health
education
housing
crime
living
6.4
7.7
7.7
11.5
6.4
9.0
5.1
1.3
Chester
78
9.0
9.0
1.3
0.0
29.5
19.2
6.4
6.4
Congleton
58
0.0
0.0
0.0
0.0
0.0
3.4
0.0
0.0
Congleton
58
37.9
20.7
3.4
5.2
27.6
25.9
27.6
24.1
Crewe & Nantwich
74
4.1
4.1
5.4
2.7
6.8
8.1
0.0
12.2
Crewe & Nantwich
74
20.3
20.3
2.7
0.0
14.9
29.7
28.4
12.2
54
9.3
14.8
1.9
0.0
11.1
16.7
20.4
14.8
living
health
78
total number of SOAs
crime
employment
Table 3-20 Percentage of SOAs within the least deprived 10% nationally, by IMD domain
Chester
income
overall
Table 3-19 Percentage of SOAs within the most deprived 10% nationally, by IMD domain
total number of SOAs
Ellesmere Port & Neston
54
1.9
5.6
7.4
5.6
14.8
0.0
3.7
3.7
Ellesmere Port & Neston
Macclesfield
99
0.0
0.0
1.0
3.0
0.0
5.1
1.0
2.0
Macclesfield
99
35.4
31.3
18.2
11.1
47.5
15.2
17.2
18.2
Vale Royal
79
2.5
5.1
6.3
5.1
3.8
2.5
1.3
2.5
Vale Royal
79
15.2
20.3
2.5
0.0
26.6
20.3
6.3
8.9
Warrington
125
7.2
5.6
10.4
15.2
8.0
0.8
0.0
10.4
Warrington
125
10.4
16.8
2.4
0.0
20.0
31.2
18.4
4.0
Cheshire & Warrington
567
3.5
4.1
5.8
7.1
5.5
4.1
1.4
5.1
Cheshire & Warrington
567
19.2
19.4
5.1
2.5
26.3
23.1
17.3
11.6
Source: DCLG
•
As well as providing overall measures of deprivation, the IMD also provides data against ‘domains’ of deprivation.
•
Table 3-19 and Table 3-20 show how well Cheshire & Warrington performs across the IMD domains. Table 3-19 shows the proportion of SOAs within the worst 10% nationally, highlighting those areas where Cheshire & Warrington performs worse than the national average.
Source: DCLG
•
Table 3-20 shows the proportion of SOAs in the least deprived 10% of SOAs nationally, highlighting those areas where Cheshire & Warrington performs better than the national average.
•
The tables show that although there may be some issues within particular districts (e.g. education in Ellesmere Port & Neston), Cheshire & Warrington performs very well overall – with plenty of green in Table 3-20.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Worklessness Figure 3-79: Unemployment rate for Cheshire & Warrington, North West and UK
•
Encouragingly, unemployment in Cheshire & Warrington has remained considerably lower than that in the North West and Great Britain from 1999 to 2006, despite a narrowing of the difference in 2002/03.
•
Cheshire & Warrington also, in 2006, had a lower proportion of the working age population on benefits (JSA/IB/SDA) and only 23 percent of the working age population were workless28 compared to 27.5 percent in the North West29.
•
Several districts in Cheshire & Warrington compare favourably to relevant comparators in the North West. Chester, Congleton and Ellesmere Port & Neston had particularly low unemployment rates in 2005/06.
•
The labour market in Cheshire & Warrington is therefore tight in comparison to the North West. The percentage change in target workless (those unemployed or economically inactive but want a job) fell by over 17 percent between 2001 and 2006 compared to only 11 percent in the North West30.
Unemployment rate
8 7 6 5 4 3 2 1 0 Mar 1999Feb 2000
Mar 2000Feb 2001
Mar 2001Feb 2002
Mar 2002Feb 2003
Cheshire and Warrington
Mar 2003Feb 2004
Apr 2004Mar 2005
North West
Apr 2005Mar 2006
Great Britain
Source: LFS and APS
250 200 150 100
Source: LFS and APS
Oswestry
Manchester
Salford
Liverpool
Stoke on Trent
Wirral
Halton
St Helens
Trafford
Newcastle-under-Lyme
Wigan
Wrexham
Stockport
Crewe and Nantwich
Vale Royal
Warrington
Macclesfield
Cheshire and Warrington
Stafford
Chester
Congleton
0
Flintshire
50
Ellesmere Port and Neston
Unemployment rate Apr 2005 - Mar 2006 (GB=100)
Figure 3-80: Indexed unemployment rate for selected areas (GB=100)
28
Defined as the sum of workless who want a job, unemployed (ILO defined), and JSA/IB/SDA claimants in 2006. 29 Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 11. 30 Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 13.
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Figure 3-81 Incapacity benefits claimants by super output area
•
In terms of worklessness through ill health or disability, Cheshire & Warrington again performs relatively well, with only 6.5% of the WAP claiming IB/SDA in 2006, compared with 10.2% in the North West and 7.7% in the UK.
•
There are three significant pockets where 12 or more per 100 of the population are claiming IB/SDA; these are Chester, Warrington, and in the South West of the Cheshire & Warrington area. In the main, rural areas are typically characterised by fewer than three claimants per 100 population, although in the South West this worsens to between three and nine per 100 population.
•
The majority of claimants, in 2006, were aged between 35 and 59 which was in line with that observed in the North West as a whole. Of those claiming incapacity benefits, 57% had been receiving benefits for five years or more.31
31
Source: Crown Copyright
Cheshire & Warrington Worklessness Study An Interim Report, Regeneris Consulting, 2007, pg 16.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
4: Forecasts for the sub-region
Recent growth in Cheshire & Warrington and neighbouring areas in the context of wider regional economic performance 2000-04 •
Over 2000-04, the Cheshire & Warrington economy is estimated to have lagged the North West in terms of growth in GVA and employment, as growth in the sub-region slowed from that seen over the previous decade.
•
Data are not published for Cheshire CC area and Warrington separately, but on the basis of the industrial structure of the two economies we would have expected GVA growth in Warrington to have been slower than that in Cheshire, despite seeing similar rates of employment growth32. However, data published by the Office for National Statistics (ONS) for NUTS 3 economies (Cheshire and Halton & Warrington) indicate that growth was weaker in the Cheshire CC area than in Halton & Warrington33.
•
Over this period, growth in the neighbouring parts of the region, Greater Manchester and Merseyside, was stronger, growing at a similar rate to the North West as a whole.
•
The pattern of growth in neighbouring areas was mixed: GVA and employment growth in Newcastle-under-Lyme and Wrexham is estimated to have been weak, while growth in Oswestry and Flintshire was strong.
2004-06 •
Estimates for the recent performance of the Cheshire & Warrington economy suggest that GVA growth has picked up, while that in the North West remained around 2.2% p.a. Employment growth in Cheshire & Warrington is estimated to have picked up to 2.2% p.a., while that in the North West actually slowed to 0.6% p.a. Much of this growth is estimated to have occurred in 2005, when employment is estimated to have increased by 3.8%34.
•
On the basis of industry mix, GVA growth is estimated to have been strongest in Cheshire compared with Warrington, although employment growth was estimated to have been stronger in Warrington. The employment growth in Warrington has been in relatively low productivity sectors such as distribution and land transport.
•
GVA growth in Merseyside is estimated to have accelerated, while in Greater Manchester growth slowed, and this is reflected in
32
Cambridge Econometrics’ estimates of GVA based on employment in Warrington and productivity in the NUTS 2 sub-region of the former county of Cheshire. 33 Data are in current prices. Differences with CE estimates are still being investigated with the ONS.
34
This is the last year for which data for employment in Cheshire & Warrington are available from the ABI.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
relative employment growth. Growth in both of these neighbouring parts of the region was, however, estimated to be slower than in Cheshire & Warrington over this period. •
Of the remaining neighbouring areas, GVA growth is estimated to have been strongest in Flintshire (stronger than in Cheshire & Warrington) and Stafford (slower than Cheshire & Warrington), which are also estimated to have seen strong employment growth (stronger than Cheshire & Warrington in both areas).
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Investigating the poor recent performance of GVA growth in Cheshire & Warrington
•
CE’s estimates of historical sub-regional GVA are constructed using district-level employment by 41 industries, and NUTS 2level (i.e. former county of Cheshire) GVA/productivity. The data are also deflated to remove the effects of price inflation. According to CE's data (total industry value added), the slow growth in Cheshire & Warrington over 2000-04 appears to be the result of slow growth in Warrington (1.6% p.a. compared with 2.5% in Cheshire). However, NUTS 3 GVA data for Cheshire and Halton & Warrington suggest that Halton & Warrington grew faster than Cheshire over 2000-04. It implies significant differences in productivity and productivity growth in the two parts of the study area. The potential inconsistencies are currently being investigated by ONS. However, it should be noted that the data will be less robust for smaller spatial areas.
•
Industrial structure and poor productivity growth relative to the North West were key factors in the slower GVA growth seen in Warrington, whereas only productivity growth was generally a key factor in Cheshire.
•
Over 2000-04, the main industries in which employment performance in Warrington was worse than Cheshire, were distribution, hotels & catering, professional services and miscellaneous services.
150 Pharmaceuticals
100 Outperformance vs NW
•
Figure 4-1: Absolute difference in GVA performance by sector in Cheshire & Warrington (£m, 2003 prices), 2000-04
Land transport
Banking & finance
Computing services
50 Hotels & catering Rubber & plastics PAD
-150
-100
0
-50
0
Education Chemicals Misc. services Manufactured fuels
50
Food, drink & tobacco
100
150
200
250
Communications
-50 Mechanical engineering
Non-financial business services
-100 Other transport equipment
Professional services
-150 Outperformance vs UK
Source: ONS Regional Accounts and Cambridge Econometrics.
•
Figure 4-1 compares the absolute change in GVA by sector over 2000-04 in Cheshire & Warrington with what it would have been if both employment and productivity growth had been the same as the North West or the UK averages for the sector. The points in the bottom-left quadrant represent industries that underperformed both the North West and UK, and so contributed to the slower GVA performance over 2000-04.
•
Many of the underperforming industries in Cheshire & Warrington are in the manufacturing sector, with manufactured fuels, other transport equipment, chemicals, food, drink & tobacco, rubber & plastics and mechanical engineering all contributing to slower relative GVA growth over this period.
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•
All of these underperforming manufacturing industries are estimated to have seen slower growth in productivity than in the North West and UK over this period.
•
A number of services also underperformed the North West and UK over this period, most notably professional services, education and miscellaneous services35. Of these industries, only professional services is estimated to have seen slower growth in productivity over this period, and education and miscellaneous services saw fairly sharp falls in employment.
•
The chart also shows that pharmaceuticals made a very strong positive contribution to GVA growth in the sub-region over this period.
35
Miscellaneous services includes leisure services and personal services, such as hairdressing.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Recent growth performance in the North West Figure 4-2: Annual growth in GVA in the North West and UK, 2003 prices
•
Gross Value Added (GVA), the accepted measure of economic output, increased by 35% in constant prices in the North West between 1990 and 2005. This is equivalent to an average annual growth rate of 2%, 0.4pp below the UK average of 2.4%.
•
The gap in growth between the North West and UK narrowed to an average of 0.2pp per annum between 1998 and 2005, with the main effect beginning in 2001 when the North was affected less than the South by a sharp slowdown in the US. These cyclical effects, similar to those seen in the early 1990s, have now worked through, but they are thought to have contributed to better relative growth results up to and including 2005.
•
It is unclear how far recent cyclical effects may have masked a modest improvement in the underlying relative economic performance of the region. The shape of the relative GVA per head graph looks remarkably stable in recent years, but it also reflects quite marked changes in population. The apparent improvement in 2005 should be treated with care since the figures shown might have been influenced by what we now know to be a short-lived slowdown.
5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
Northwest
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
-2.0%
1991
-1.0%
UK
Figure 4-3: GVA per resident head - % difference between North West and UK
15.0% 14.0% 13.0% 12.0% 11.0% 10.0% 2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
9.0%
Source: ONS Regional Accounts and Cambridge Econometrics.
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Context for Growth: Prospects for the North West economy
Figure 4-5: Alternative forecasts of employment in the North West, Index 2005=100.
115
Figure 4-4: Alternative forecasts of GVA in the North West, Index 2005=100.
110 105
170 160 150 140 130 120 110 100 90 80 2000
100 95 90 85 80 2000
2005
2010
2015
2020
2025
REFP_0607
37
The forecasts for economic growth in the North West as developed by the North West Regional Economic Forecasting Panel (REFP)36 predict weaker overall growth than in Cambridge Econometrics’ latest published forecast for the North West37. However, both forecasts expect growth in the North West to lag that for the UK as a whole.
2015
2020
2025
REFP_0607
Source: ONS Regional Accounts and Cambridge Econometrics and North West REFP.
•
The REFP forecast predicts GVA growth of just over 2% p.a. over 2006-26, while CE’s forecast predicts growth of just under 2½% p.a. over the same period.
•
The REFP forecast predicts slower growth in productivity than CE’s forecast, and so employment growth in the REFP forecast for the North West is expected to be just under ½% p.a. over 2006-26, while in CE’s forecast it is expected to be ½% p.a. over the same period.
Source: ONS Regional Accounts and Cambridge Econometrics and North West REFP.
36
2010 CE_Feb07
CE_Feb07
•
2005
State of the North West Economy Long-term Forecasts, March 2007. Regional Economic Prospects, Cambridge Econometrics, February 2007.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
account the relative economic prospects of all the regions in the UK.
Context for Growth: Future population growth in the North West Figure 4-6: Alternative forecasts of population in the North West, 000s.
•
Both sets of forecasts predict a turnaround from the trends (mainly downwards) in population in the North West over the last twenty years or so, but the REFP projections predict that the trend growth seen over the last five years or so will continue in the long term.
•
Under the REFP/ONS population projections, total population in the North West is expected to grow by 0.3% p.a. over 2006-26. Under CE’s forecasts, population is expected to grow by only 0.2% p.a. over the same period. Both projections show the North West population growing more slowly than the UK population as a whole.
7400 7300 7200 7100 7000 6900 6800 6700 6600 1990
1995
2000
2005
CE_Feb07
2010
2015
2020
2025
REFP_0607
Source: ONS and Cambridge Econometrics and North West REFP.
•
Although the REFP economic forecasts for the North West are less optimistic than CE’s forecasts, growth in population is expected to be faster under the REFP forecasts than CE’s.
•
In developing its forecast, the REFP accepted the 2004-based ONS regional population projections, which are based on trends in the natural rate of increase (i.e. births minus deaths) and recent rates of in- and out-migration.
•
In contrast, CE’s population forecasts use the ONS projections for the natural rate of increase, but rates of migration take into
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Context for Growth: Underlying demographic trends for Cheshire Figure 4-7: Alternative forecasts of population in Cheshire & Warrington (000s)
The population projections for Cheshire & Warrington as developed, supplied and used by Cheshire County Council, also predict growth of 0.2% p.a. in the long term.
•
Figure 4-8: Population projections for Cheshire & Warrington (000s)
940
1000
920 900
900
880
700
800 600
860 840
500
820 1990
400
1995
2000
CE_Feb07
2005
2010
2015
Cheshire County Council
2020
300 1990
2025
ONS
Source: ONS Mid year population estimates and 2004-based sub-national population projections, Cheshire County Council and Cambridge Econometrics.
•
As with the overall projections for the North West, the ONS population projections for Cheshire & Warrington predict faster growth than forecast by Cambridge Econometrics.
•
The ONS projections predict population growth of 0.3% p.a. in Cheshire & Warrington over 2006-26, the same rate as expected in the ONS projections for the North West as a whole.
•
CE’s sub-regional projections for Cheshire & Warrington, which are based on the ONS sub-regional projections but are made consistent with CE’s own forecast for population in the North West, predict growth of 0.2% p.a. in the long term.
1995
2000 Total
2005
2010
2015
2020
2025
Working age population
Source: ONS Mid year population estimates and 2004-based sub-national population projection.
•
Although total population in the sub-region is expected to grow in the long-term, the working-age population38 is expected to fall. This is also the case for the North West, but the trend may become apparent in Cheshire & Warrington sooner.
•
According to ONS population projections, working age population in the North West is expected to fall by 0.1% p.a. over 2006-26, and by 0.2% p.a. in Cheshire & Warrington over the same period.
38
Working-age population is defined as men aged 16-64 and women aged 16-59, over the whole forecast period, for consistency. The state retirement age for women will increase to 65 between 2010 and 2020.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Forecasts for Cheshire & Warrington: An overview
•
The slow GVA growth seen in Cheshire & Warrington over the last few years is expected to be a short term phenomenon, and the sub-region is forecast to return to growth at a faster rate than the North West as whole (2½% p.a. vs. 2¼% p.a.), as was the case over the majority of the last 20 years or so. Growth in the subregion is expected to be slightly slower than the UK average of just over 2½% p.a.
•
Even so, employment in Cheshire & Warrington, which has lagged growth in the North West in recent years, is only expected to grow at a similar rate to the North West average in the long term (½% p.a.), slightly slower than the UK average.
•
The implication of the forecast is that the gap in GVA per capita between Cheshire & Warrington and the UK, which has narrowed in recent years as GVA growth slowed in the sub-region, will widen once again, albeit modestly.
•
The Cheshire & Warrington economy is also expected to outperform most of its neighbours, at least in terms of GVA growth, and the gap between GVA per capita in the sub-region and its neighbours is also expected to widen.
•
There is uncertainty over the extent to which a declining workingage population will hold back economic growth. One impact could be an increase in commuting from neighbouring areas.
•
Strong growth in GVA in Cheshire & Warrington is expected to come from manufacturing, as well as services, although strong productivity growth means that employment in manufacturing in
Figure 4-9: Forecasts of GVA in Cheshire & Warrington (2005=100)
160 150 140 130 120 110 100 90 80 70 1996
2001
2006 C&W
2011 NW
2016
UK
Figure 4-10: Forecasts of GVA per capita (£thousands, 2003 prices)
30 25 20 15 10 5 0 1996
2001
2006 C&W
Source: Cambridge Econometrics
2011 NW
UK
2016
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
the sub-region is expected to continue falling in the long term, albeit not as strongly as in the 1980s or 1990s. •
•
Figure 4-12: Forecasts of Employment, 2005=100
Within services, the strongest GVA growth is expected in communications, computing services, professional services and non-financial business services. These are also the sectors where much of the job growth is expected to come from, although large sectors such as retailing and health & social work are expected to see fairly large absolute increases in employment. In the short to medium term, the sectoral pattern of GVA growth would be expected to favour Cheshire, although employment growth is expected to be faster in Warrington. However, in the longer term, as Omega comes onstream, growth in Warrington is expected to outperform Cheshire, driven mainly by strong growth in financial & business services.
110 105 100 95 90 85 80 75 1996
2001
2006
2011 C&W
2016
2000
2002 C&W
2004 NW
2006
2008
2010
2012
UK
Source: Cambridge Econometrics
•
Overall employment growth in Cheshire & Warrington in the long term is expected to be slightly slower than over the past couple of decades, and similar to growth in the North West as a whole which in turn is expected to be slightly slower than UK average growth.
•
This is something of a turnaround from the past couple of decades, when employment growth in the sub-region was generally much faster than the North West as a whole, and somewhat faster than the UK average.
•
In terms of employment growth, Cheshire & Warrington is still expected to outperform many of its neighbours, but rates of growth are expected to be much closer, and with growth in Greater Manchester, for example, expected to be very slightly faster in the long term.
Figure 4-11: Forecasts of Employment in Cheshire & Warrington, 000s
540 520 500 480 460 440 420 400 1996
1998
Source: Cambridge Econometrics
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Forecasts for Cheshire & Warrington: The medium term (2006-10)
•
Both Cheshire and Warrington are both expected to see slower rates of GVA growth over 2006-10 than seen in 2004-06. In contrast, GVA in the North West is forecast to rise at a faster rate over 2006-10 than it did in 2004-06. Nevertheless, overall GVA growth in Cheshire is still expected to outperform regional growth by ¼ pp. GVA in Warrington is forecast to grow at about the regional rate.
•
Similarly, both Cheshire and Warrington are expected to see slower employment growth over 2006-10 than in 2004-06. In contrast, employment growth in the North West is forecast to remain the same. This is mainly because employment growth in Cheshire & Warrington was quite strong (2% p.a.) over 2004-06, while in the North West it was only 0.6% p.a.
•
Manufacturing plays an important role in the North West economy, generating about 18% of the region's total output. Cheshire is even more dependent on this sector, which is responsible for a quarter of total GVA. Manufacturing output is expected to increase by 2.8% p.a. in Cheshire over 2006-10, almost twice the regional rate of 1.6%. In contrast, only 10% of Warrington's total GVA comes from manufacturing and growth is expected to reach only 0.7% p.a. over 2006-10. Even though manufacturing has the largest share of total GVA in Cheshire, it accounts for only about 15% of total direct employment. In Warrington, only about 7% of total jobs are directly in manufacturing.
Figure 4-13: Growth in GVA, 2006-10 (% p.a.)
4 3 2
TOTAL
9. Government and other services
8. Financial & business services
7. Transport & comms.
6. Distrib., hotel & cater.
5. Construction
4. Elect., gas, water
-2
3. Manufacturing
-1
1. Agriculture
0
2. Mining, quarrying etc
1
-3 C&W
NW
Source: Cambridge Econometrics.
Figure 4-14: Growth in employment, 2006-10 (% p.a.).
-7 -8 C&W
TOTAL
9. Government and other services
8. Financial & business services
7. Transport & comms.
6. Distrib., hotel & cater.
5. Construction
4. Elect., gas, water
3. Manufacturing
-3 -4 -5 -6
2. Mining, quarrying etc
-1 -2
1. Agriculture
3 2 1 0
NW
Source: ONS Regional Accounts and Cambridge Econometrics
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Expected trends in GVA in services over this period are quite similar in Cheshire & Warrington and the North West. Distribution, hotels & catering, transport & communications, financial & business services and government services are all expected to enjoy healthy output growth, at rates of between 2-3% p.a. over 2006-10. Financial & business services constitutes the largest sector in Cheshire & Warrington in terms of GVA.
•
The largest sectors in Cheshire are government services and distribution, hotels & catering. Together they account directly for half of all jobs in the county.
•
The bulk of jobs in Warrington come from financial & business services, government services and distribution, hotels & catering. Together, these three sectors support directly almost 75% of total employment in Warrington.
•
In the North West as a whole, government services alone provides over 32% of total employment, and financial & business services a further 17% and distribution, hotels & catering 23%.
•
In both Cheshire & Warrington and the North West, employment growth is forecast to be fastest in transport & communications, financial & business services and government services over 200610. In contrast, employment in agriculture, mining & quarrying, manufacturing and utilities is expected to continue to fall over the same period.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Forecasts for Cheshire & Warrington: The long term Figure 4-15: Long Term Growth in Cheshire, 2010-20 (% p.a.).
•
Over 2010-20, GVA growth in Cheshire & Warrington is forecast to be 2½% p.a., compared with 2¼% for North West as a whole. Employment growth of ½% p.a. is similar to the North West average over this period.
•
Strong GVA growth in Cheshire & Warrington is expected in services, led by financial & business services (3% p.a.), but also in manufacturing (3% p.a.), although employment in manufacturing is still expected to fall, by almost 1% p.a. Employment in financial & business services is expected to grow by around 1% p.a.
•
Within financial & business services, the strongest growth is expected in computing services, followed by banking & finance and non-financial business services.
•
In absolute terms, the greatest increase in jobs in Cheshire & Warrington is expected in retailing (6,700), followed by health & social work (5,700), banking & finance (5,000) non-financial business services (4,900) and computing services (4,300).
•
The predicted growth of 6,700 jobs in retailing accounts for 24% of the increase in this industry expected in the North West as a whole, which is just more than expected in Merseyside (23%), and less than expected in Greater Manchester (35%). Cheshire & Warrington is also projected to see 5,700 more jobs in health & social work (24% of the increase in employment expected in this industry in the North West as a whole).
4 3 2
TOTAL
9. Government and other services
8. Financial & business services
7. Transport & comms.
6. Distrib., hotel & cater.
5. Construction
4. Elect., gas, water
-3
3. Manufacturing
-2
1. Agriculture
0 -1
2. Mining, quarrying etc
1
-4 GVA
Employment
Source: Cambridge Econometrics.
Cheshire
G.Manc
Merseyside
Source: ONS Regional Accounts and Cambridge Econometrics
TOTAL
9. Government and other services
8. Financial & business services
7. Transport & comms.
6. Distrib., hotel & cater.
5. Construction
4. Elect., gas, water
2. Mining, quarrying etc
1. Agriculture
50 45 40 35 30 25 20 15 10 5 0
3. Manufacturing
Figure 4-16: Share of Regional Employment Growth, 2010-20 (%).
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
•
Within the key financial & business service sector, employment in Cheshire & Warrington is projected to increase by 4,900 jobs in non-financial business services (12% of the North West increase, which compares with 40% for greater Manchester and 20% for Merseyside). A growth of 4,300 jobs is expected in Computing Services. This would represent 20% of the North West increase (compared to 34% occurring in Greater Manchester and 12% in Merseyside).
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there is uncertainty about the impact that the building at Omega will have on output and employment in the industry within Cheshire & Warrington. The contractors for large projects such as this are likely to be based outside the sub-region, and the labour employed may also not be resident within Cheshire & Warrington. Also, as the work on construction of this particular site ramps up, it is quite likely that a number of large projects in nearby subregions such as Greater Manchester and Merseyside will be completed, thus releasing resources.
Forecasts for Cheshire & Warrington: The performance of key sectors Figure 4-17: Performance of key sectors: current employment and the forecast difference in annual GVA growth vs the North West (pp), 2006-20. pp 1.5 Wood & w ood products
1.0
Non-financial business services
Land transport Food, drink & tobacco
0.5
Distribution Banking & finance Health & social w ork
•
In banking & finance, the relative attraction of the sub-region to potential inward investors has declined in recent years, and in the short term at least, new employment opportunities are more likely to go to the larger nearby financial areas of Manchester and Liverpool (as shown by the recent inward investment decision by the Bank of America to locate in Manchester). That said, the employment prospects in the sector overall are expected to be limited. In the long term, however, the development of Omega could prove attractive to large financial institutions. In the longterm, therefore, growth in banking & finance in Cheshire & Warrington is expected to be similar to the North West average (2¾% p.a. in GVA and just under 1% p.a. in employment), with most of the growth being seen in Warrington. The main uncertainty lies in whether these jobs will be entirely new jobs for the region, or whether they will displace similar jobs either within the sub-region or from elsewhere in the North West.
•
The situation for professional services is similar to banking & finance, with the development of Omega likely to boost overall growth in the sector in Cheshire & Warrington. Growth in this
Construction
0.0 PAD Computing services
-0.5
Misc. services Education
Professional services
Retailing
Hotels & catering
-1.0
Communications Pharmaceuticals
-1.5 0
10
20
30
40
50
60
Employment, 2006 (000s) Source: Cambridge Econometrics.
•
Figure 4-17 shows the importance of different sectors to the Cheshire & Warrington economy and their prospects for growth, plotting employment for each industry against the difference in GVA growth forecast for that industry in Cheshire & Warrington relative to the North West as a whole. Industries above the zero line are therefore expected to outperform the North West, in GVA terms, in the forecast period.
•
In construction, growth is expected to be similar to the North West average (1½% p.a. in GVA and ½% p.a. in employment) in the long term. Growth in construction is notoriously volatile, and
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
industry is also expected to be similar to the North West average (2½% p.a. in GVA and ¾% p.a. in employment), again with stronger growth in Warrington. •
Computing Services is also expected to be a fast-growing industry, and the sub-region is expected to maintain its share of overall employment in this industry in the region as a whole. GVA is expected to grow by 5¾% p.a. and employment by around 2½% p.a., similar to the North West average. Although the industry is not one of the largest employers in the sub-region, it is still among the top 15, and accounts for around 8% of employment.
•
Prospects for retailing, the largest industry Cheshire & Warrington in terms of employment (accounting for more than 10% of employment), are for slightly slower growth (2¼% p.a. in GVA and ½% p.a. in employment) than for the North West as a whole (2½% p.a. in GVA and ¾% p.a. in employment) in the long term, as the sub-region is impacted by the strength of competing retailing offers in Liverpool and Manchester in particular resulting form the significant investment and redevelopment that has been taking place there. This is also expected to be somewhat slower than the UK average growth.
•
Growth in hotels & catering is expected to be similar to the North West average (just over 1½% p.a. in GVA and ¼% p.a. in employment), but still some way behind the UK average (2% p.a. in GVA and ¾% p.a. in employment).
•
Pharmaceuticals accounts for just over 6% of employment in Cheshire & Warrington (all in Cheshire). However, even though the high productivity nature of the industry means that GVA
growth is expected to be strong in the long term (5¼% p.a.), this is not expected to be as fast as in the North West (7% p.a.) or UK (6½% p.a.) as a whole, and employment is expected to fall at a faster rate than in the North West and UK. •
The importance of pharmaceuticals to the Cheshire & Warrington economy is such that if GVA growth turned out to be 2 pp slower than forecast (e.g. 3.3% p.a. rather than 5.3% p.a. as forecast) overall GVA growth in the sub-region would be 0.12 pp slower than forecast. Thus, the outturn for this industry could be a deciding factor in whether the Cheshire & Warrington economy does actually outperform the North West or not in the long term.
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some of this is due to wealthy retirees and out-commuters (whose contribution to the sub-region’s GVA is indirect – through spending - rather than direct).
5: Summary SWOT analysis
From the above analyses we summarise the key strengths, weaknesses, opportunities and threats associated with the Cheshire & Warrington economy below.
•
Well-qualified residents. Average GCSE attainment levels in Cheshire & Warrington schools are high, and Cheshire & Warrington has substantially higher than average proportions of degree-qualified residents (31.4% of working age population vs. 26.5% for GB).
•
A diverse economy. Whilst some parts of the economy are contracting, the sub-region is not over-exposed to any single sector, and it has important strengths in various expanding sectors, including banking and finance, computing services, retail and distribution – providing employment opportunities for a wide range of skills levels.
•
Good external connections. The travel to work movements that have been discussed are a feature of Cheshire & Warrington’s connectivity – its location is relatively central to the UK, with good north/south motorway and rail connections39. The central location, and ‘gateway’ position into North Wales and into the North West are assets that can be built on.
•
High proportion of employment in knowledge intensive businesses. On the measure used in Investing in Success, 29% of
Strengths •
•
•
High quality of life. On many measures, the sub-region scores very well as a place to live and work. All of the sub-region’s seven local authorities featured in the Halifax’s top 250 for Quality of Life (only eight other North West authorities were included). House prices in the district indicate the popularity of the subregion in terms of being a place where people want to live, and there is a strong performance on other indicators – educational standards are high as are household earnings and residence based earnings. Proximity to Manchester and Liverpool. The sub-region benefits from agglomeration effects associated with these large urban centres – which have strong trading links with Cheshire & Warrington firms (as customers and suppliers), and which have a critical mass of economic and cultural activity that attracts skilled labour and inward investors to the area. Affluent residents. The sub-region’s residents are relatively wealthy: gross disposable household income per head is 5% above the national average (for the Cheshire NUTS2 area) – though
39
Rail journeys from Macclesfield, Crewe and Congleton to London Euston are now less than 2hrs long, while a journey time of 2hrs 1minute can be achieved from Warrington as a result of improvements to the West Coast Mainline. Journeys to Birmingham can be as short as 1hr 20 minutes.
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employees are in knowledge-intensive industries (vs. 28% for GB and 24.6% for the region). •
•
High levels of engagement in economic activity. Unemployment rates, NEET rates and incapacity benefit rates are substantially below national and regional average rates. Across the sub-region, average activity rates have been 1pp to 2pp higher than the GB average over the last few years. Strong growth in business stock built on high levels of entrepreneurship. Cheshire & Warrington performs well as a whole in terms of business creation: the rate of growth in VAT registrations per 10,000 working age people has exceeded the GB average in every year since 2001 – while the headline number of registrations is also higher in Cheshire & Warrington than regionally and nationally. Add this evidence to the fact that survival rates have remained close to the national average, and it is apparent that Cheshire & Warrington is a good place in which to start a business.
and GVA over the last decade. Whereas Cheshire & Warrington accounted for about 5.9% of the UK’s chemicals GVA in 1995, the share reduced to 3.7% in 2004. On a lesser scale, the subregion’s position in the insurance sector has also worsened, reducing from 1.5% of the sector’s UK GVA in 1997 to 0.3% in 2004. •
Flat workplace-based earnings growth in some districts. Since 2002, median workplace-based full-time earnings in Vale Royal and Chester appear to have lagged significantly behind the UK growth. It is possible that the recent influx of migrant workers from Eastern Europe may have contributed to suppressing wage growth in Chester.
•
Declining numbers of young adults (20-39 year olds). There has been a 12% decline in the number of people in this age group over the last decade: from 241,600 in 1995 to 212,600 in 2005. Over that period, this age group’s share of the total population has reduced from 27.8% to 23.7% in Cheshire and from 30.3% to 26.3% in Warrington (vs. 29.5% to 27.3% for GB). While the numbers of people in the 40-59 age group have increased, this reduction in the number of people at an earlier stage of their careers could constrain the growth of firms – especially in Cheshire.
•
Emerging skills shortages. There is indeed some evidence of skills shortages constraining growth. 5% of employers in Cheshire & Warrington report skills-shortage vacancies, versus the 3.8% average for England.
Weaknesses •
•
Relatively slow GVA growth in recent years. Whilst Cheshire & Warrington’s GVA per head is higher than any other North West sub-region, and higher than the national average, recent growth rates have lagged the UK and regional averages. The difference in GVA per head in the Cheshire NUTS2 area and the UK has narrowed from 14% in 1995 to 7% in 2004. Decline of some important high productivity sectors. The chemicals sector has seen a marked reduction in both employment
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•
•
•
Exploiting previously developed land. Cheshire & Warrington had 1,859 hectares of previously developed land in 2005 (down 15% since 2002). The sub-region has the opportunity to further enhance its image and to attract new investment by bringing this land back into use through sustainable commercial and residential development. Omega, in particular, represents a major opportunity for stimulating employment growth in the sub-region.
•
Benefiting from the renaissance of Manchester and Liverpool. These major cities are key engines of growth for the North West economy. Their regeneration is helping to transform the image of the region as a place to live and work – both for people born here and for potential new residents from elsewhere. As part of both the Liverpool and Manchester city regions, Cheshire & Warrington has the potential to benefit disproportionately from this growth in commercial and cultural opportunities.
•
Harnessing the economic contribution of inward migrants. Recent years have seen a significant influx of migrants – especially from Eastern Europe. In 2005/06, a total of 5,590 registrations for National Insurance numbers were made by nonUK nationals in the sub-region – most of which were in Crewe & Nantwich, Chester and Warrington. Many of these migrants are young adults – helping to re-dress the falling numbers of the indigenous 20-39 age group. Integrating these migrants, such that
Lack of a focal point. Although not explicit within the data available, the emergence of ‘regional centres’ within sub-regions as growth points of an economy is being increasingly recognised within wider policy. Cheshire & Warrington has a number of centres, such as Warrington, Macclesfield, Chester and Crewe, but not having a single major and internationally identifiable centre may prove to be an unavoidable disadvantage going forward.
•
Although Cheshire & Warrington has the opportunity to bring more land back into use – the deliverability of bringing land into use is a weakness to be addressed. Much of the land is difficult to redevelop due to the previous use while external public sector support for bringing brownfield land back into use is generally concentrated in urban areas of major deprivation.
•
Poor internal connections. As identified in ‘Investing in Success’, Cheshire & Warrington suffers from poor internal connectivity in terms of both road infrastructure and public transport provision.
Opportunities •
banking & finance, computing services and professional services. With a critical mass of employment opportunities in these areas, Cheshire & Warrington has the potential for attracting new investment and job growth in these sectors.
Pockets of severe deprivation. Whilst deprivation is much less of a problem for Cheshire & Warrington than for the region as a whole, it does have a number of pockets of severe deprivation, especially in parts of Warrington, Ellesmere Port, Crewe and Chester.
Strengthening Cheshire & Warrington’s position in high value added service sectors. The sub-region has a promising position in some high productivity, high growth service sectors such as
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their economic contribution is maximised, represents an important opportunity for the sub-region. •
Benefiting from the development of the University of Chester. Having recently achieved University status, the University of Chester has the potential to increase its scale and scope over the next several years. Retaining an increasing proportion of graduates on completion of their studies could be an important means of addressing the declining numbers of young adults in the subregion’s workforce, as well as potentially offering some knowledge transfer benefits for local businesses.
•
Using changing demographics to the sub-region’s advantage. With an ageing population, and as a place with a high quality of life where people want to live, the area will have increasing numbers of retirees who will not be directly contributing to the economy (other through their spending). Tapping into their skill sets, spending power and experience, however, and encouraging extended involvement in supporting economic activity (e.g. through mentoring or social enterprise) represents an opportunity for the sub-region.
•
Creating local employment opportunities for outward commuters. As of 2001, there were over 105,000 gross out-flow movements from Cheshire & Warrington districts, particularly from those districts with highly qualified people employed in high occupational groups. Given the age profile of internal migration into Cheshire & Warrington districts, it would appear likely that the number has increased since then. As many of these outcommuters are highly skilled: whilst they appear in the
qualifications statistics for the Cheshire & Warrington sub-region, they are in reality part of Manchester’s (rather than Cheshire & Warrington’s) labour force. Creating opportunities for increasing numbers of these people to work closer to their homes would help both to stimulate economic growth in the sub-region and to reduce carbon emissions associated with travel.
Threats •
Pressure on the pharmaceuticals sector - employment and GVA. The pharmaceuticals sector is an important employer in the sub-region, which currently accounts for approximately 14% of the UK’s GVA in this sector. The recent announcement of a reduction of 700 jobs over three years at AstraZeneca’s Hurdsfield manufacturing plant in Macclesfield reflects the drive to improve efficiency due to increasing levels of competition from suppliers of ‘generic’ versions of drugs. We are forecasting that employment in this sector will reduce, although output will continue to rise. Faster than expected job reductions, or lower than expected increases in future productivity, would lead to a lower economic contribution from this sector, which would have a material impact on the sub-region’s overall GVA growth.
•
Ongoing pressures on other manufacturing sectors and the risks of ‘shocks’ to the economy. Manufacturing employment in Cheshire & Warrington has held up relatively well compared to the UK and regional averages. However, globalisation continues to put a downward pressure on manufacturing employment. Furthermore, the need to reduce carbon emissions is likely to present Cheshire & Warrington’s manufacturers with new
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commercial and operational challenges. Cheshire & Warrington continues to have a large share of employment in large businesses – losing individual large employers can ‘shock’ local economies. •
Threat of re-location/offshoring of high GVA service sector jobs. The high productivity service sectors in which Cheshire & Warrington has promising position – e.g. banking & finance, computing services and professional services – are not necessarily tied to local markets, and they are therefore subject to risks from corporate restructuring activity, such as mergers and acquisitions and offshoring – especially given developments in ICT, and the trend towards outsourcing of back-office activities.
•
Housing pressures leading to worsening skills shortages. The sub-region has a shortage of affordable housing that is contributing to some employers finding it difficult to fill positions. In a recent study, 20% of surveyed employers considered that a lack of affordable housing was having a detrimental effect on their business.
•
Risk of mid Cheshire becoming a dormitory economy. Vale Royal and Congleton have seen relatively weak job creation and earnings growth in recent years, and have low jobs densities. They have, however, seen relatively strong net internal migration (especially Vale Royal). There is a risk that these parts of Cheshire will become increasingly like ‘dormitory economies’.
•
Risks associated with success. Cheshire & Warrington is a highly successful economy but with that success come risks that need to be managed. These may be practical, for example the increasing dependency ratio, or more strategic – for example, will
policy makers view Cheshire & Warrington as an area where there is no need to provide support? Cheshire & Warrington therefore needs to use its successes as opportunities and promote the subregion as an area where success can bring forward more success. •
Failures to spread benefits of strong economic performance. Although deprivation levels are low in Cheshire & Warrington, there remains the threat of polarisation between areas of success and areas where that success is not being felt. Failure to join opportunity with need is a threat that, downstream, could present a lag on the overall economy.
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the priorities identified so that, going forward, CWEA can consider the ‘gaps’ that need to be filled
6: Appraisal of strategic priorities •
The current portfolio of interventions •
•
•
Investing in Success was complemented by an Action Plan of interventions designed to support the economic development of the sub-region. Many of these projects were already in the pipeline, representing responses to needs and priorities previously identified, and as such did not necessarily fully align with the objectives and strategic priorities identified in Investing in Success. At this review point, it is important to understand how the projects listed in the Action Plan contribute to the strategic needs of the sub-region today, and what the priorities should be going forward.
From the Action Plan we extracted the ‘sets’ of interventions that are currently in-play within the sub-region. The list of interventions identified is shown in Table 6-1.
Table 6-1: Intervention ‘sets’ within the Investing in Success Action Plan Main headings in Action Plan
Intervention ‘set’ for appraisal purposes
Deeside Hub
Ellesmere Port & Neston/EDZ BESS (MDA) Chester Culture Park Chester Super Zoo
Crewe Gateway
Crewe Gateway
Warrington Crossroads
Warrington Crossroads
Weaver Valley
Northwich Vision
To do this, a two stage approach has been applied: Weaver Valley Regional Park
Stage 1 – the portfolio of interventions outlined within the existing Action Plan has been assessed to understand what they contribute to a) the need to focus on GVA per employee (productivity), and b) the needs of deprived areas and deprived communities Stage 2 – based on the SWOT assessment presented in section 5, a list of potential future priorities has been developed. The current portfolio of interventions has been appraised to understand how current activity contributes to
Middlewich Eastern Bypass Enterprise & People
Enterprise Generator People & Jobs
NE Cheshire Growth Engine
NE Cheshire Growth Engine
Year of the Gardens
Year of the Gardens
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Stage 1 – Responding to the need for improved productivity or to deprivation ?
Figure 6-1: Map of the current portfolio of interventions, in terms of focus on higher/lower GVA per employee activity and degree of focus on deprivation 100
•
The Stage 1 process took the 13 identified ‘sets’ of interventions, considered the projected financial contributions of NWDA, and mapped the investments to illustrate how they contribute to a growth in overall productivity (GVA per employee) and also the extent to which they focus on deprived areas. The results of this analysis are shown in Figure 6-1.
People & Jobs
Focused on deprived areas
Bubble size proportional to NWDA 4 year investment (total £126m) BESS
Ellesmere Port & Neston/EDZ Warrington Crossroads
Weaver Valley Regional Park
Crewe Gateway Enterprise Generator
Chester Super Zoo
•
•
•
Interventions that sit to right hand side of the chart have been judged to be focused on supporting high GVA/employee activity, while those to the left are focused on relatively low GVA per employee activity. Those interventions that appear higher up vertically within the plot are appraised as having a strong focus on deprived areas, while those towards the bottom are not particularly focused on deprived areas. The size of the bubble indicates the projected financial contribution of NWDA to the project over four years. The analysis is, of course, subjective to an extent. We should stress, moreover, that the point of this exercise is to appraise the overall portfolio of interventions, rather than the individual interventions themselves. One should not aspire, for example, for every intervention to appear in the top right hand corner of this matrix (high productivity jobs in deprived areas): this would be both unrealistic and unbalanced.
Middlewich Eastern Bypass
Year of the Gardens
Focused on non-deprived areas
Northwich Vision
NE Cheshire Growth Chester Culture Park 0 0
100
Focused on supporting low GVA/employee activity
Focused on supporting high GVA/employee activity
Source: SQW assessment of interventions derived from Investing in Success Action Plan, NWDA contributions derived from the Action Plan.
•
Two key messages emerge from this exercise:
There is a considerable amount of projected NWDA expenditure in the bottom left quadrant of the chart – i.e. on projects which are associated with relatively low productivity employment and which are not particularly responding to the needs of deprived areas. Although this could suggest a poor rationale for investment, such projects may add value in other ways. For example, it is argued that Chester Super Zoo will have important branding benefits for the sub-region, and that this will leverage further investment.
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The portfolio of interventions appears to lack any initiative which is strongly focused on high GVA per employee economic activity (i.e. to the right hand side of the chart). This may be appropriate, as it may be the case that the needs of these employers are being fully served by the market (including the Omega development) and/or by interventions that will have a broader impact. However, given the points made in the SWOT regarding the need to retain and develop higher-end employment opportunities, it would be worth CWEA considering whether enough is being done to ensure that the sub-region remains attractive to current and potential future employers in the highest productivity sectors (e.g. banking & finance, computing services, professional services, pharmaceuticals, motor vehicles, chemicals).
Stage 2 – Contribution of interventions to potential future priorities •
Having undertaken the SWOT assessment, we have distilled a proposed set of potential priorities for the future. The list of priorities is based on the collective review of the evidence presented; it is by no means a ‘closed-list’, but is intended to provide an initial guide for Cheshire & Warrington partners as they begin to develop a strategy for the future. The potential future priorities are identified in the table below.
•
The objective under this Stage was to assess the portfolio of interventions against these proposed strategic priorities, to see to what extent the portfolio as a whole addresses the needs identified.
Table 6-2: Potential future priorities emerging from the SWOT analysis •
Strengthening Cheshire & Warrington’s position in value added service sectors
•
Mitigating the impact of, and realising the opportunities from, demographic change
•
Mitigating the risks of contraction in high value manufacturing
•
Addressing the shortage of appropriate and affordable housing
•
Maintaining a high quality of life and sense of place, to maintain the sub-region’s attractiveness as a place to live, work, study and visit
•
Creating local employment opportunities for outward commuters
•
Exploiting and bringing forward previously developed land
•
Addressing flat income growth in Chester and Vale Royal
•
Responding to pockets of severe deprivation
•
Preventing a dormitory economy developing in mid Cheshire
•
Harnessing the benefits of inward migration
•
The results of the appraisal are shown in Table 6-3. Each intervention has been given an indicative score between 0 and 10 with regard to the intervention’s contribution towards each potential priority. Again, the results are of course subjective, and it is not the intention to provide an in-depth appraisal of each intervention, but rather to assess the overall strategic direction of the portfolio of interventions.
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Ellesmere Port & Neston/ EDZ
BESS (MDA)
Chester Culture Park
Chester Super Zoo
Crewe Gateway
Warrington Crossroads
Northwich Vision
Weaver Valley Regional Park
Middlewich Eastern Bypass
Enterprise Generator
People & Jobs
NE Cheshire Growth Engine
Year of the Gardens
Total
Table 6-3: Indicative appraisal of the current intervention portfolio against the potential future priorities for Cheshire & Warrington
Responding to pockets of severe deprivation
7
8
4
4
8
8
7
5
4
7
9
2
1
74
Maintaining a high quality of life and sense of place, to maintain the sub-region’s attractiveness as a place to live, work, study and visit
2
2
8
6
6
4
7
8
3
3
2
3
6
60
Mitigating the risks of contraction in high value manufacturing
6
6
1
1
6
6
7
3
7
6
4
3
0
56
Strengthening Cheshire & Warrington’s position in value added service sectors
4
4
2
1
5
8
6
3
5
7
6
4
0
55
Creating local employment opportunities for outward commuters
5
5
2
2
5
6
6
4
5
5
5
4
0
54
Mitigating the impact of, and realising the opportunities from, demographic change
2
2
2
2
5
5
5
5
3
6
6
6
1
50
Addressing flat income growth in Chester and Vale Royal
4
4
2
2
4
4
8
4
7
5
3
0
1
48
Exploiting and bringing forward previously developed land
9
1
2
0
6
6
7
8
2
0
0
0
0
41
Preventing a dormitory economy developing in mid Cheshire
0
0
0
0
4
4
9
6
8
3
3
0
0
37
Harnessing the benefits of inward migration
2
2
1
1
6
3
2
2
2
1
1
1
1
25
Addressing the shortage of appropriate and affordable housing Source: SQW assessment, in discussion with CWEA
1
1
1
0
6
6
7
1
1
0
0
0
0
24
Potential future priorities identified from the SWOT analysis
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Analysis •
•
•
It should be noted that we have deliberately not shown the total ‘scores’ for each intervention, as this would not be particularly meaningful: in practice, an intervention that scores 9 for one of the priorities might be of much more value than one that scores 3 for four of the priorities. We have, however, totalled the scores for each priority in order to give some indication of the extent to which the current portfolio is addressing the perceived future priorities. It is possible, indeed likely, that local stakeholders will have differing views on the extent to which individual interventions address the various needs. Such debate is to be encouraged, as this should serve to stimulate strategic thinking. The total contribution of all the intervention sets against any of the potential priorities identified can score no more than 130. Scores ranged between 24 and 74, with 24 therefore being the priority against which the current portfolio of projects is making the lowest contribution, and the score of 74 being for the priority for which the current range of projects is making the most contribution. It would be unexpected, considering the range and variety of projects, for the interventions to score highly against every potential priority. In the following sub-sections, we consider the priorities in descending order of the extent to which they are being addressed by the current portfolio of interventions.
Responding to pockets of severe deprivation
•
Cheshire & Warrington, relative to may other areas, does not have a pronounced and embedded deprivation problem as such to address. What it does, however, have are small pockets of deprivation in particular locations.
•
Investing in Success placed a notable emphasis on supporting the most deprived areas of Cheshire & Warrington and, correspondingly, the projects within the Action Plan score 74 against meeting this need. Many of the projects within the Action Plan are spatially aligned with the areas of greatest deprivation and need, while the ‘People & Jobs’ project is designed to support deprived groups in accessing employment opportunity.
•
Going forward, it is essential that a project such as ‘People & Jobs’ recognises the types of jobs that will be created in projects such as the Ellesmere Port/Neston EDZ. By linking ‘access to employment’ projects with the areas in which jobs are being created, deprivation can be tackled in a sustainable and enduring way. In this way, the response to the sub-region’s deprivation requirements is fundamentally linked to its wider economic performance.
Maintaining a quality of life and sense of place, to maintain the subregion’s attractiveness as a place to live, work, study and visit
•
The sets of interventions scored 60 against this priority – the second highest score overall. Much effort has gone into supporting aspects of the visitor economy in Cheshire & Warrington to ensure that the sub-region maintains its ‘offer’ and
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continues to attract visitors while offering a high quality of life to current and potential new residents and employers. Projects such as Chester Culture Park, Chester Super Zoo and the Weaver Valley are all designed to support this intent. •
It is essential going forward that Cheshire & Warrington maximises the benefits of these investments to the full. This means taking steps to encourage greater spend within the subregion (there is some anecdotal evidence of Cheshire being a place where ‘day-trippers’ visit with spend on hotels etc. taking place outside of the sub-region). Linked to this is a need to ensure that tourism efforts remain focused on maximising GVA.
Strengthening Cheshire & Warrington’s position in value added service sectors
•
Based on the SWOT assessment and supporting data this potential priority was felt to be the most significant for the sub-region. The intervention sets scored a total of 55 against this priority.
•
A variety of projects were felt to be contributing to supporting the priority to some extent (in the range of scoring 4 to 6) with the most significant intervention sets being the Warrington Crossroads and the Enterprise Generator. The former intervention includes a range of actions to improve the transport interchanges within Warrington, investment in the University of Chester and in reclaiming brownfield land, and as yet unidentified investment in the Omega project which has a strong service-sector emphasis. This is a strategically important project for the sub-region, and the North West overall. The Enterprise Generator set of projects, operating across the sub-region, includes an emphasis on utilising ICT infrastructure to support business growth and this should be particularly beneficial to service sector firms.
•
In terms of developing value added service sectors, Cheshire & Warrington may wish to consider what support is required to assist businesses and individuals that currently supply Cheshire & Warrington’s manufacturing base. Research undertaken by Scottish Enterprise has suggested that although the North Sea Oil Industry is in decline in terms of output, the service sector supporting the industry is well placed to support growing international markets in the provision of specialist industry related services. Given the presence of many specialist industries such as organics and pharmaceuticals in Cheshire & Warrington, there
Mitigating the risks of contraction in high value manufacturing
•
•
To a great extent, the contraction of the manufacturing sector within Cheshire & Warrington is being driven by forces beyond the control of local partners and sub-regional intervention. The imperative therefore is to mitigate the associated risks and respond to retain as much high value added manufacturing as is possible while ensuring other sectors (such as the service sector) expand to back fill GVA and absorb employment. The intervention sets scored 56 against this potential priority largely due to the number of projects intending to develop new employment opportunities and new employment sites (including town centre developments).
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may be scope to ‘internationalise’ specialist service sector expertise in the local economy to support the growth of these sectors in markets overseas. Creating local employment opportunities for outward commuters
•
We note within the SWOT that much of the sub-region’s wealthcreating potential (e.g. the highly qualified population) builds wealth and GVA within adjacent economic geographies.
•
A score of 54 was achieved against this priority with various interventions scoring between 4 and 6. No set of interventions scored more than 6. The projects that were felt to be contributing to this potential priority varied in their type. Development of sites and centres (Northwich, Crewe) were felt to contribute into providing employment space closer to where people live, while projects such as the NE Cheshire Growth Engine and Enterprise Generator intend to support local business growth.
•
Key, however, is drawing in business activity that currently takes place outside Cheshire & Warrington but that is undertaken by local residents. Although re-location of businesses is an option, another aspect to consider may be to encourage more home working and smaller business growth, allowing people to work closer to where they live.
number of projects were felt to be making contributions (in the range 3-5) to the priority without any particular intervention standing out. •
Certain projects, such as the Enterprise Generator and People & Jobs scored well. One possible area where projects such as these could contribute more to meeting the potential priority is in targeting or using particular demographic groups. Within the Cheshire & Warrington population there may be retired entrepreneurs or managers, for example, whose skills would be still relevant in supporting enterprise and growth in the sub-region. Similarly, encouraging older cohorts to continue working within the ‘People & Jobs’ set of projects might also be an option.
•
In reality, it may be that responding to the wider set of potential priorities will make the most considerable difference to this priority. Provision of affordable housing for example, which is more accessible to younger cohorts, will be one key mechanism for increasing the numbers of people within younger age ranges.
Addressing flat income growth in Chester and Vale Royal
•
Northwich Vision and the Middlewich Eastern Bypass projects were regarded as the projects that would contribute most to this potential priority. As a spatially specific priority, some projects acting away from the local area are unlikely to make notable contributions.
•
Income growth is dependant on the employment types being accessed by residents. Chester, for example, has seen a growth in the visitor economy which generally tends to provide low
Mitigating the impact of, and realising the opportunities from, demographic change
•
A score of 50 was achieved by the sets of interventions against this objective. No project scored more than 6 and in general, a
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earnings. Therefore, improvements against other priorities that seek to encourage, for example, more local employment and a greater share of employment in higher value services are the primary actions for addressing low income growth.
Preventing a dormitory economy developing in mid Cheshire
•
Exploiting and bringing forward previously developed land
•
Cheshire & Warrington contains a stock of previously developed land that could be considered for redevelopment. The important question is what the most appropriate form of redevelopment is and how deliverable that development will be.
•
Only a limited number of intervention sets are felt to be contributing to this priority (e.g. the Ellesmere Port/Neston EDZ), however, those that do tend to score relatively highly with the overall score being 41.
The interventions included in the Investing in Success Action Plan include elements that are focused on the mid-Cheshire area as well as projects in adjacent areas that will be of benefit to local residents. Improvements in Northwich and Middlewich, as well as the Weaver Valley project, should seek to encourage economic development within the mid-Cheshire area in ways that encourage activity within the local economy (e.g. employment, local retail to maintain town centres). The score against this priority was 37.
Harnessing the benefits of inward migration
•
Given the cross-section of potential priorities that have been identified, the development of previously developed land could be seen as an enabling mechanism for achieving wider goals. The need for sectoral adjustment (from manufacturing to higher value services) and for affordable housing, are both facilitated by the allocation of land and policies towards land use. Partners will therefore need to consider how the economic priorities of the subregion align with the planning priorities of the sub-region (and region) to assess where policy can be ‘joined-up’ to achieve twin goals of enhanced economic development and sustainability.
•
A score of only 25 was achieved against this potential priority, the second lowest aggregate score across the 11 priorities.
•
Migration into Cheshire & Warrington has, in the main, been focused on a number of centres which have witnessed the most considerable growth in jobs over recent years. Important to maximising the value of these migrants is the stimulation of jobs in sectors where they can contribute a greater value of GVA. Other potential priorities are intended to support this.
•
One area for particular consideration however is encouraging inmigration of graduates or ‘nesters’40 to the local economy. This will assist in responding to a number of the demographic issues being faced but, will require the potential provision of appropriate housing. The current set of projects do little to meet this potential priority.
40
Young people who are reaching the stage in their life where they are looking to purchase property, potentially as a couple, and settle down.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Addressing the shortage of appropriate and affordable housing
•
•
This potential priority responds to concerns expressed within various elements of the SWOT. First, Cheshire & Warrington is a desirable place where people want to live and the affordability of housing has reduced. At the same time, there is a need to act on the reducing working age population and to encourage people to work closer to home. Provision of appropriate housing would therefore form part of a ‘package’ of measures to support other interventions and to develop the wider economy. A score of only 24 was achieved against this priority, with just three sets of interventions (Crewe Gateway, Northwich Vision and Warrington Crossroads) regarded as making any notable contribution to meeting the priority. These areas represent locations where the need for further housing is likely (particularly Crewe and Warrington given migration flows and increases in the number of jobs). However, thought is required as to how development of housing across Cheshire & Warrington can support wider economic growth particularly as affordability pressures are more likely in rural areas where more affluent inmigrants settle.
particularly responding to the needs of deprived areas. While such projects may add value in other ways, CWEA should consider whether the portfolio is too heavily weighted towards visitor economy initiatives.
The portfolio of interventions appears to lack any initiative which is strongly focused on high GVA per employee economic activity. CWEA should consider whether enough is being done to ensure that the subregion remains attractive to current and potential future employers in the highest productivity sectors.
While the current portfolio of interventions appears to be addressing the ‘pockets of severe deprivation’ and ‘quality-of-life/sense of place’ priorities reasonably well, the portfolio did not appear to be contributing much towards the ‘affordable housing’ and ‘benefits of inward migration’ priorities. CWEA should consider whether it agrees with our proposed priorities, and, if so, whether there is a need to strengthen the portfolio’s response to those priorities that currently appear to be underaddressed.
Conclusions from the appraisal of interventions •
Our key conclusions on the current portfolio of interventions are as follows:
There is a considerable amount of projected NWDA expenditure in projects which are associated with relatively low productivity employment and which are not
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
movements took place within Chester. Inflows are the number of movements to the district and outflows the number of movement from the district with the net difference also shown.
Annex A: Travel to work flows Cheshire & Warrington districts • Table A-1 Travel to work flows by district District
Self-containment
Inflow
Outflow
Netdifference
Overall, there is modest net inward commuting based on the 2001 census data, but this masks the large variations between districts (see the following maps).
41
Chester
34,600
31,800
20,500
11,300
Congleton
20,800
13,100
23,600
-10,500
Crewe & Nantwich
37,200
13,900
14,100
-200
Ellesmere Port & Neston
18,300
16,100
18,500
-2,500
Macclesfield
46,100
33,300
26,600
6,700
Vale Royal
32,500
13,800
24,300
-10,500
Warrington
60,400
42,100
30,600
11,500
302,900
111,100
105,200
5,900
Cheshire & Warrington Source: Census 2001
•
Travel-to-work patterns show the commuting flows of individuals. This data was last collected during the Census of 2001, and there has been no subsequent update. The patterns that emerged must therefore be regarded with some caution due to the time-frame that has passed.
•
The self-containment area represents the number of internal travel to work flows within any given district. For example, the selfcontainment figure for Chester is 34,600 – meaning that 34,600
41
Due to rounding, net difference may not equal inflow/outflow figures exactly.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Chester Figure A-1 TTW movements to Chester
Figure A-2 TTW movements from Chester
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
6.1
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Crewe & Nantwich Figure A-3 TTW movements to Crewe & Nantwich
Figure A-4 TTW movements from Crewe & Nantwich
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Congleton Figure A-5 TTW movements to Congleton
Figure A-6 TTW movements from Congleton
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Ellesmere Port & Neston Figure A-7 TTW movements to Ellesmere Port & Neston
Figure A-8 TTW Movements from Ellesmere Port & Neston
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Macclesfield Figure A-9 TTW movements to Macclesfield
Figure A-10 TTW movements from Macclesfield
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Vale Royal Figure A-11 TTW movements to Vale Royal
Figure A-12 TTW movements from Vale Royal
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Warrington Figure A-13 TTW movements to Warrington
Figure A-14 TTW movements from Warrington
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
Source: Census 2001, Mapping Crown Copyright, map produced by SQW.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Annex B: Sector profiles – Cheshire & Warrington districts
Chester Figure B-1 Broad sectoral structure and employment change 2000-2005 - Chester 30
•
•
20
A location quotient shows how represented an individual sector is within an economy relative to Great Britain. A score of 1 would mean that representation locally is equal to that witnessed at the national level. Scores above 1 (right hand side of the vertical axis) mean the sector is over-represented relative to Great Britain, and scores of less than 1 (left hand side of the vertical axis) mean these sector is under-represented relative to Great Britain. Having an over-representation or under-representation in certain sectors should not necessarily be taken to be ‘a bad thing’, and the score of 1.0 should not be seen as an ideal score. Employment change between 2000 and 2005 is shown horizontally within the following charts with those sectors that have seen employment increases positioned above the horizontal axis, and those that have seen decreases positioned below the horizontal axis. The bubble size reflects the number of employees within the sector in 2005 and therefore the biggest bubbles are those sectors employing the most people. One general point to make about all the Cheshire & Warrington districts is the under-representation, relative to the Great Britain average, of employment in the public sector. All districts have a negative location quotient for public sector employment. That said, all the districts have seen increases in employment in the public sector between 2000 and 2005.
% change in no of employees, 2000-05
•
10 0 0
0.5
-10
1
1.5
2
-20 -30 LQ Che s te r vs Gre at Britain, 2005
A griculture and f ishing Construction Transport and communications Public administration,education & health
Manuf acturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
Source: ABI
•
Chester, in many ways has a ‘modern’ sectoral structure with distribution, hotels and restaurants, and banking, finance and insurance, being represented at a level above that for Great Britain. The tourism and visitor economy sector is obviously significant and these over-represented sectors continue to grow with employment gains since 2000.
•
Manufacturing, construction and other services are underrepresented and continue to decline while agriculture, a relatively over-represented sector, has also seen employment decreases. The Chester economy is therefore becoming less diverse, with an increasing concentration of employment in a small number of sectors.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Crewe & Nantwich
Congleton
Figure B-2 Broad sectoral structure and employment change 2000-2005 – Crewe & Nantwich
Figure B-3 Broad sectoral structure and employment change 2000-2005 Congleton 50 40 30
80 60
% change in no of employees, 2000-05
% change in no of employees, 2000-05
100
40 20 0 0
0.5
-20 1
1.5
2
-40
0
0.5
-80
2
2.5
3
LQ Congle ton vs Gre at Britain, 2005
LQ Cre w e and Nantw ich vs Gre at Britain, 2005
Agriculture and fishing Manuf acturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
Manuf acturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
Source: ABI
1.5
-30 -40 -50
-60
Agriculture and fishing Construction Transport and communications Public administration,education & health
20 10 0 -10 1 -20
Energy and w ater Construction Transport and communications Public administration,education & health
Source: ABI
•
Manufacturing is over-represented in the Crewe & Nantwich economy but, unlike in many areas in the UK where this is the case, Crewe & Nantwich has not seen a decrease in employment in the sector over recent years.
•
Congleton has witnessed a marked reduction of employment in manufacturing (33%) between 2000 and 2005 yet the sector is still strongly over-represented. The largest employer is distribution, hotels and restaurants which is also over-represented.
•
Given Crewe’s location as a transport hub, it is unsurprising to see transport and communications over-represented relative to Great Britain. However, employment in distribution etc. is close to the Great Britain average despite the key transport interchanges being in place that would support such.
•
•
Service sector industries are relatively under-represented in Crewe & Nantwich.
The important point to note with regard Congleton is that the wider evidence shows considerable commuting movements, and that the resident population is highly qualified and well paid. While banking, finance and insurance might be under-represented in Congleton’s industrial structure, many of its residents are likely to be employed in the sector outside of Congleton.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Ellesmere Port & Neston
Macclesfield
Figure B-4 Broad sectoral structure and employment change 2000-2005 – Ellesmere Port & Neston
Figure B-5 Broad sectoral structure and employment change 2000-2005 Macclesfield
% change in no of employees, 200005
80
40 20 0
0
0.5
-20
1
1.5
2
2.5
3
0
-40
Agriculture and fishing Manufacturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
Manufacturing Distribution, hotels and restaurants Banking, f inance and insurance, etc Other services
Source: ABI
•
Unsurprisingly, given the number of major manufacturing sites within the district (e.g. Vauxhall), Ellesmere Port & Neston has the highest location quotient for the manufacturing sector of all the Cheshire & Warrington districts.
•
Distribution, hotels and restaurants is the only sector that is overrepresented and has witnessed growth in employment since 2000. The highest employment growth (close to 60%) has been in banking, finance and insurance, which remains under-represented but has moved closer to the Great Britain average.
0.5
1.5
2
2.5
LQ M accle s fie ld vs Gre at Britain, 2005
LQ Elle s m e re Port vs Gre at Britain, 2005
A griculture and f ishing Construction Transport and communications Public administration,education & health
•
% change in no of employees, 2000-05
60
40 30 20 10 0 -10 1 -20 -30 -40 -50 -60
Energy and w ater Construction Transport and communications Public administration,education & health
Source: ABI
•
Macclesfield, like Congleton, has been recognised as having significant commuter flows to areas outside of Cheshire & Warrington. Unlike Congleton however, Macclesfield does have an over-representation of banking, finance and insurance jobs relative to Great Britain.
•
The agricultural sector is over-represented as is manufacturing which has seen job growth between 2000 and 2005. Distribution, hotels and restaurants is the largest employer in the district and is on a par with Great Britain in terms of representation within the economy.
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Cheshire & Warrington Economic Review and Forecasts A Final Report to CWEA and NWDA
Vale Royal
Warrington
Figure B-6 Broad sectoral structure and employment change 2000-2005 – Vale Royal
Figure B-7 Broad sectoral structure and employment change 2000-2005 Warrington
50 40
% change in no of employees, 2000-05
% change in no of employees, 2000-05
70 60
30 20 10 0
0.5
0 -10 1 -20 -30
1.5
2
2.5
3
3.5
0
0.5
LQ Vale Royal vs Gre at Britain, 2005 A griculture and f ishing Manufacturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
40 30 20 10 0 -10 1 -20 -30 -40 -50 -60 -70
1.5
2
2.5
3
3.5
LQ Warrington vs Gre at Britain, 2005
Energy and w ater Construction Transport and communications Public administration,education & health
Agriculture and fishing Manuf acturing Distribution, hotels and restaurants Banking, finance and insurance, etc Other services
Source: ABI
Energy and w ater Construction Transport and communications Public administration,education & health
Source: ABI
•
The chart for Vale Royal is skewed by the over-representation of the energy and water sector which has a location quotient of 2.6. Although a relatively small employer in many districts, the sector is significant in Vale Royal.
•
Apart form energy and water, and relative to the other Cheshire & Warrington districts, most sectors are clustered close to the Great Britain average in terms of representation. Manufacturing is overrepresented but has been moving towards the Great Britain figure, while banking, finance and insurance is under-represented but also moving closer to Great Britain.
•
As in Vale Royal, energy and water is a significant sector in Warrington. However, the sector here has lost close to 50% of employment between 2000 and 2005.
•
Manufacturing is under-represented and has witnessed employment losses. Like Crewe & Nantwich which acts as an important motorway and mainline rail node, Warrington has an over-representation in transport and communications. The district also has a large banking, finance and insurance sector which has seen employment growth while distribution, hotels and restaurants has remained relatively static.
B-4