employment in london - forecasts
DESCRIPTION
Employment in London - Forecasts. Bridget Rosewell. Background. Provide a medium term outlook over 15 years Take into account structural shifts Avoid need to forecast uncertain drivers. Method. Identify and analyse appropriate historical trends for London and component sectors - PowerPoint PPT PresentationTRANSCRIPT
Bridget Rosewell
Employment in London - Forecasts
Background
•Provide a medium term outlook over 15 years
•Take into account structural shifts
•Avoid need to forecast uncertain drivers
Method
•Identify and analyse appropriate historical trends for London and component sectors•Identify breaks in trend over past period•Consider likelihood of future trends differing from the past•Construct trend figures•Adjust where trends considered likely to change
Employment Output RelationshipTotal employment (log) as a proportion of total London GVA
1971 - 2000
tim
Lo
g o
f to
tal e
mp
loym
en
t d
ivid
ed
by r
ea
l L
on
do
n G
VA
£m
n
1970 1975 1980 1985 1990 1995 2000
-3.2
-3.1
-3.0
-2.9
-2.8
-2.7
Implications
•If the economy grows on average at 2.5%
–And job creation over 30 year average rate, only 70,000 new jobs by 2016–With job creation at 90s rates, 1 million new jobs by 2016
•Because the move to services is more labour intensive and the decline in manufacturing largely complete
The SDS Forecast•Takes the underlying growth of 2.5%•Moderates the short term trend over the next decade back towards the longer term one•Takes a trend based view of all individual sectors, except two•Business services constrained so that share does not increase over 40%•Health and education adjusted upward
on policy grounds (50,000 jobs)
The Growth Question
•Growth has averaged 2.7% since 1982•Treasury assumption is 2.75% - recently revised up from 2.5% when the SDS was prepared•London can at least be expected to match the UK
Ouput Growth In London and the UK
-4
-2
0
2
4
6
8
1971 1976 1981 1986 1991 1996
London UK
Difference Between London and UK Growth
-4
-3
-2
-1
0
1
2
3
1971 1976 1981 1986 1991 1996
Growth: London and the UK•London grew less fast than the UK in the 1970s•In the 1980s at around the same rate•And possibly faster in the most recent years
London GDP at 2.5% and 2.75% growth1971=100
80
130
180
230
280
Job Creation
•How many jobs does growth create?•Over the 1981-2000 period, on average the economy had to grow 2.4%pa to stop employment falling•But over the 1990s, this rate was only 1.2%
London GDP & EmploymentGDP, 1971=100 & Employment 000s
80
130
180
230
280
3000
3500
4000
4500
5000
5500
GDP Employment
Numerical Change in Employee Jobs (between 1973 & 2000, 1973 & 1989, and 1989 & 2000)
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
Num
eric
al c
hang
e in
em
ploy
ee jo
bs
Manufacturing
Public Admin.& Defence
Transport andCommunicationsConstruction
Wholesaling
Health and Education
Agriculture, Forestry &FishingRetailing
Hotels & Catering
Other social and personalservicesOther Financial &Business ServicesBusiness Services
Banking & Insurance
1973 to 2000
1973 to 2000
1973 to 1989
1973 to 1989
1989 to 2000
1989 to 2000
History
•Employment fell in the 1970s and 80s•But has made up these falls in the 90s•Much of the fall is the decline in manufacturing in the capital•Services has grown throughout, especially business services
Business Services Trends Business services employment (log) as a proportion of total London GVA 1971 - 2000
Log
of b
usin
ess
serv
ices
em
ploy
men
t di
vide
d by
rea
l Lon
don
GV
A £
mn
1970 1975 1980 1985 1990 1995 2000
-4.9
0-4
.85
-4.8
0-4
.75
-4.7
0-4
.65
-4.6
0
1971
2000
1991
1980
1985
1996
1976
Employment in 2000 Primary and utilities
Manufacturing
Construction
Wholesale
Retail
Hotels & restaurants
Transport & comms
Financial services
Business services
Public administration
Health & Education
Other services
Employment in 2016 Primary and utilities
Manufacturing
Construction
Wholesale
Retail
Hotels & restaurants
Transport & comms
Financial services
Business services
Public administration
Health & Education
Other services
SDS Employment Forecast
2 0 0 0 2 0 1 6 D if fe re n c eP rim a ry a n d u ti l itie s 2 0 1 5 -5M a n u fa c tu rin g 3 2 8 2 4 0 -8 8C o n s tr u c t io n 2 1 5 1 6 0 -5 5W h o le s a le 2 7 5 2 9 0 1 5R e ta il 4 0 4 4 1 5 1 1H o te ls & re s ta u ra n ts 2 9 4 4 4 5 1 5 1T ra n s p o r t & c o m m s 3 6 1 3 2 5 -3 6F in a n c ia l s e rv ic e s 2 4 8 2 7 5 2 7B u s in e s s s e rv ic e s 1 1 2 3 1 5 9 0 4 6 7P u b lic a d m in is tr a t io n 2 2 7 1 7 5 -5 2H e a lth & E d u c a t io n 6 1 0 6 6 0 5 1O th e r s e rv ic e s 3 3 9 5 3 0 1 9 1
T o ta l 4 4 5 3 5 1 2 0 6 6 7
Other Views
•The SDS view not isolated•Other modellers provide similar figures•All based on strong growth FBS and stabilisation elsewhere
Average annual growth rate
SDS (2000-16
0.89
CEBR (2001-23)
0.88
OEF (2000-17)
0.78
Long Term Forecasts
0
1000
2000
3000
4000
5000
6000
7000
1982 1987 1992 1997 2002 2007 2012 2017 2022 2027
Year
Tota
l em
ploy
men
t ('0
00)
Volterra
OEF
Long term forecasts
0
500
1000
1500
2000
2500
Year
Tota
l job
s ('0
00)
OEF Business Services forecast
Volterra Business Services forecast
OEF Financial Services forecast
Volterra Financial Services forecast