Greater Manchester Forecasting Model 25 th November 2014 Professor Neil Gibson Special Advisor:...

Greater Manchester Forecasting Model

25th November 2014

Professor Neil Gibson

Special Advisor: Oxford Economics

Agenda

■The key facts

■Changes since last release

■The outlook

■Exploring the unemployment story

■Commuting flows – how have they changed?

■Risks and policy considerations

■Our details & what is available

2

The key facts

3

4

Greater Manchester - A vital component of the UK economy

■ 2014

■2.7 Million People

■ Employment

■1.4 Million Jobs

■ Gross Value Added

■£54.7 billion GVA

Source: Oxford Economics

Service sector dominates the labour market…

5

Greater Manchester Population & employment breakdown - 2014

Source: Annual Population Survey, Oxford Economics

Employed51%

Elderly population

16%

Child population

20%

Unemployed2%

Student3%

Looking after family home

3%

Sick3%

Other2% Business

services26%

Public services

26%

Other19%

Wholesale & retail15%

Manufacturing8%

Construction6%

…generating over half the wealth

6

£55 Billion

Sectoral breakdown of GM’s 2014 GVA


0 10,000 20,000 30,000 40,000 50,000

£m 2011

Public services Business servicesManufacturing Wholesale & retail

Construction

Other

Manchester accounts for over a quarter of jobs

7

% of total GM Employment 2014


Bolton

9.0 % Bury

5.5 %

Rochdale

5.9 %

Oldham

6.5 %

Stockport

10.1%

Tameside

5.7 %

Manchester

27.7 %

Wigan

8.4 %

Trafford

11.4 %

Salford

9.9 %

… and GVA

8

% of total GM GVA 2014


Bolton

8.4 % Bury

4.9%

Rochdale

5.5 %

Oldham

5.9 %

Stockport

10.1%

Tameside

5.56%

Manchester

29.3 %

Wigan

7.7 %

Trafford

12.0 %

Salford

10.6 %

Changes since last release

9

Forecast changes modest – new starting points

10

Population Greater Manchester

Employment Greater Manchester

Source: ONS, Oxford Economics

■ Demographic outlook remains similar.

■ The total employment level in 2014 is some 48,000 jobs higher than that estimated in the last release.

■ The jobs forecast is very similar to last year, albeit from a higher base.

2,500

2,550

2,600

2,650

2,700

2,750

2,800

2,850

2,900

2,950

2000 2005 2010 2015 2020

(000

s)

Current release

Last release

1,200

1,250

1,300

1,350

1,400

1,450

1,500

1,550

2000 2005 2010 2015 2020

(000

s)Current release

Last release


11

GVA Greater Manchester

Unemployment Greater Manchester

Source: ONS, Claimant Count, Oxford Economics

■ The unemployment outlook is more positive this year, with around 20,000 fewer claimants expected in 2024.

■ The latest data shows 2014 to have been better than expected

■ Welfare effect more muted than provisioned for, coupled with higher job numbers and modestly less population

■ Our GVA growth outlook for the area is marginally weaker than the previous release.

■ GVA has been rebased to 2011 prices and based upon the 2010 European System of Accounts.

-6

-4

-2

0

2

4

6

2000 2005 2010 2015 2020

( % )

Current release

Last release

20

30

40

50

60

70

80

90

2000 2005 2010 2015 2020

(000

s)

Currentrelease

Lastrelease


12

Summary of differences in 2014


Population (000s) Employment (000s) GVA growth (pp change) Unemployment (000s)Bolton -0.6 8.5 1.7 -2.3Bury -0.4 -1.0 0.7 -1.1Oldham 0.5 0.7 0.7 -1.9Rochdale -0.5 -4.6 -0.3 -1.6Stockport 0.8 -3.5 -0.3 -1.3Tameside -0.1 1.3 1.0 -1.7Trafford 1.2 12.7 1.7 -1.3Wigan 0.8 2.5 0.8 -2.4Manchester -3.4 24.3 1.6 -4.5Salford -1.2 6.9 1.2 -2.1Greater Manchester -2.8 56.2 1.2 -20.2

Specialisms – Winners and losers

13

Rochdale

Stockport

Bolton

Trafford

Wigan

Man

ches

ter

Note: Winners & Losers

Head offices

Management consultancy

Call centres

Other social work

Social security activities

Wholesale of machinery

Event catering

Retail sales in specialised stores

Call centres

Public admin of state policies

Hospital activities

Auxiliary insurance & pension

Hospital activities

Temp agency

Tax consultancy

Cleaning services

Employment agencies

Public admin of state policies

Temp agency

Amusement

Public administration of state policies

Cleaning services

Other social work


Manufacture of wearing apparel

Social work activities

Warehousing & storage

Other social work

Head offices

Residential care for elderly & disabled

Tax consultancy

Waste treatment

Temp agency

Cleaning services


Manufacture of gas

Source: BRES, Oxford Economics

2013 BRES results revealed…

14

Top 10 and bottom 10 employee changes, Greater Manchester, 2012-2013

2012-2013Temporary employment agency activities 4800Activities of call centres 4800Accounting, bookkeeping and auditing activities 4100Other postal and courier activities 3700Retail sale of other goods in specialised stores 3500Real estate activities on a fee or contract basis 3400Renting and operating of own or leased real estate 3400Event catering and other food service activities 3200Management consultancy activities 3000Wholesale of food, beverages and tobacco 2400

2012-2013Other social work activities without accommodation -6200Wholesale of other machinery, equipment and supplies -5800Cleaning activities -3500Beverage serving activities -3000Electrical, plumbing and other construction installation -2800Restaurants and mobile food service activities -2400Private security activities -2300Freight transport by road and removal services -2100Manufacture of furniture -2000Retail sale in non-specialised stores -1900

Source: BRES

Biggest changes between 2012 and 2013….

15

Secondary education: +310 jobs

Accounting, bookkeeping and auditing activities; tax consultancy: -587 jobs

Activities of call centres: +3749 jobs

Hospital activities: -2588 jobs

Renting and operating of own or leased real estate: +707 jobs

Wholesale of other machinery, equipment and supplies: -540 jobs

Warehousing and storage: +341 jobs

Activities of head offices: -1533 jobs

Administration of the State : +1715 jobs

Event catering and other food service activities: -1842 jobs

Hospital activities: +1944 jobs

Administration of the State: -1147 jobs

Accounting, bookkeeping and auditing activities; tax consultancy: +640 jobs

Manufacture of gas; distribution of gaseous fuels through mains: -1243 jobs

Administration of the State: +3090 jobs

Other social work activities: -1806 jobs

Activities of head offices: +1322 jobs

Wholesale of other machinery, equipment and supplies: -587 jobs

Manufacture of gas; distribution of gaseous fuels through mains: +1142 jobs

Wireless telecommunications activities: -667 jobs

Rochdale

Oldham

Tameside

Stockport

Salford

BoltonBury

Trafford

Wigan

Man

ches

ter

Making sense of the data?

16

Labour market indicators, change, 2012-2013

BRES, employee jobs Claimant count

APS employment

APS unemployment

Bolton 3,900 -800 -2,100 400Bury 800 -800 -300 -2,900Manchester 16,300 -2,200 12,000 -7,900Oldham 100 -1,800 2,000 -2,100Rochdale -2,600 -1,400 1,400 -1,200Salford 4,200 -900 -3,600 4,900Stockport -2,200 -600 6,600 -400Tameside 100 -1,400 2,600 1,200Trafford 7,000 -800 3,400 -900Wigan 1,200 -1,700 -4,500 1,400Greater Manchester 28,800 -12,400 17,500 -7,500North West 41,000 -30,700 37,900 -25,600

The outlook

17

18

What’s the story? – The Outlook

■ 2014 – 2024 growth

■128,000 More People

■ Employment

■109,000 Net New Jobs

■ Gross Value Added

■£17bn More annual GVA


The regional picture - In line with the UK average

19

Per Annum GVA Growth 2014 - 2024

UK 2.78%

Northern Ireland

2.23%

North West

2.53%

London 3.39%

Scotland

2.34%

Wales 2.40%

East Midlands 2.53%

South West 2.68%

South East 2.94%

East 2.85%

Greater Manchester 2.78 %

Lower than Greater Manchester

Higher than Greater Manchester

a

Recovery for all, but city economies do still lead

20

2008-2014 pa % growth 2014-2024 pa % growth

Greater Manchester

Greater Manchester

GVA growth per annum (%)

-1.50 -1.00 -0.50 0.00 0.50 1.00 1.50 2.00

Admin & support Professional, scientific & technical

Wholesale & retail transportation & storage

Real estate Financial & insurance

Electricity, gas & steam Water supply & waste management

Manufacturing Human health & social work

Other service activities Mining & Quarrying

Education Construction

Arts & entertainment Public admin & defence

Agriculture Accommodation & food

Information & comms

pp. differnce (GM % - UK %)

+6,400+8,100

-300-6,700+6,800

+13,800-3,700

-100+4,400-5,300

-14,300-500

-1,100+2,300+7,200+9,200

+11,400+31,200+29,700

Service strength leading the employment forecasts

21

UK more heavily concentrated

Greater Manchester more heavily concentrated


Change in jobs 2014-24

0 500 1,000 1,500 2,000 2,500

Mining & QuarryingAgriculture

Public admin & defenceWater supply & waste management

Electricity, gas & steamEducation

Arts & entertainmentOther service activities

Accommodation & foodTransportation & storage

Human health & social workConstruction

ManufacturingFinancial & insurance

Information & commsAdmin & support

Wholesale & retailProfessional, scientific & technical

£2011m

Non Domestic

Domestic

But industry plays bigger role in GVA outlook

22

GVA growth 2014-2024 – Greater Manchester (£m 2011)

Source: Oxford Economics Note: Excludes real estate as this includes ownership of dwellings and imputed rents

The Outlook – headline local forecasts

23


Jobs (000s) GVA (% per annum) Population (000s)Bolton 1.1 2.8% 1.3Bury 0.5 2.6% 0.9Oldham 0.4 2.4% 0.6Rochdale 0.2 2.2% 0.4Stockport 1.0 2.7% 1.2Tameside 0.2 2.2% 0.6Trafford 1.3 2.8% 0.9Wigan 0.4 2.3% 0.9Manchester 4.3 3.1% 3.9Salford 1.7 3.1% 2.0

2014 - 2024 per annum change

Private services dominating job creation

24

-5

0

5

10

15

20

25

30

35

40

45Public services

Private services

Production

Employment change, 2014-2024 (000’s)


Sectoral focus – key business services

25

ICT, professional services, administration, accommodation & food and arts employment (000s)


■ Crucial ‘backbone’ of jobs recovery

■ Growth has been strong consistently in cities

■ ICT has upside risk

0

100

200

300

400

500

600

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

Greater Manchester

Manchester & Salford

82,000Jobs

44,000Jobs

0

20

40

60

80

100

120

140

160

180

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

Greater Manchester


31,200 Jobs

17,400Jobs

10

15

20

25

30

35

40

45

50

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

Greater Manchester


6,400 Jobs

3,200Jobs

Key Drivers: ICT and professional services

26

ICT employment (000s)

Professional services employment (000s)


■ Classification can be an issue – but strong growth in parts of the country

■ Expected to grow steadily

■ ‘Big Data’ and computerisation of more activities (law, consulting etc. could see re-classification into this sector)

■ The primary source of job growth

■ ‘Catch-all’ sector for wide range of services – suggest breaking down where you can in policy circles

■ Remember outsourcing from other sectors – key to understand this sector

020406080

100120140160180200

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

Greater Manchester


29,700Jobs

16,300 Jobs

Key Drivers: Admin and hotels sector

27

Admin & support employment (000s)

Accommodation & food employment (000s)


■ Fast growing sector and likely to rise even faster as greater use of recruitment workers and outsourcing of activities

■ Needs ‘broken down’ to fully understand the local labour market – do you know what your agency workers do?

■ Key sector for both tourism and consumer spending

■ Expected to recover in line with wider economy, but could do even better?

0

20

40

60

80

100

120

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

Greater Manchester


14,900Jobs

7,300Jobs

Key Drivers: Summary

28

ICT, professional services, administration, accommodation & food and arts employment (000s)


Suggests the area has a specialism in this sector

Bolton 0.40 3.50 2.40 0.70 7.00 UK LQ <1.2Bury 0.30 1.30 0.80 0.30 2.70 UK LQ >1.2Oldham 0.30 0.90 1.00 0.20 2.40Rochdale 0.20 0.80 0.80 0.30 2.10Stockport 0.90 2.40 2.70 0.70 6.70Tameside 0.20 0.90 0.50 0.30 1.90Trafford 0.70 3.40 3.20 0.90 8.20Wigan 0.30 0.80 2.10 0.70 3.90Manchester 2.00 14.20 10.90 2.00 29.10Salford 1.20 3.20 5.40 0.60 10.40Greater Manchester 6.50 31.40 29.80 6.70 74.40

2014 - 2024 Employment Change (000s)

ICTProfessional

servicesAdministrative

servicesArts &

entertainmentTotal

Key drivers: The contrast in industrial jobs and GVA

29

Employment – Thousands GVA - £m 2011


14,000 Manufacturing job losses are forecast over the next decade, with per annum GVA growth of 1.7% expected.

50

75

100

125

150

175

200

2000 2004 2008 2012 2016 2020 2024

(000

s)

Forecast

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

2000 2004 2008 2012 2016 2020 2024(£

m 2

011)

Forecast

A little more on manufacturing…

30

Manufacture of bread tops the list of manufacturing sectors within Greater Manchester, with over 5% of total manufacturing employment coming from this sector.

Source: Business Register Employment Survey

What Greater Manchester makes…

Top Manufacturing Sectors - Greater Manchester Employees GB LQManufacture of bread, pastry goods and cakes 5,700 1.89Other printing 3,300 0.90Manufacture of plastic products 2,900 1.45Manufacture of made-up textile articles 2,900 3.08Manufacture of rusks and biscuits 2,800 2.63Machining 2,600 0.69Manufacture of builders ware of plastic 2,500 1.49Manufacture of instruments 2,300 0.93Manufacture of soap and detergents 2,200 5.13Manufacture of other food products 2,100 1.61Manufacture of other furniture 2,000 1.28Manufacture of metal structures 1,700 0.83Manufacture of motor vehicles and coachworks 1,700 2.36Manufacture of paints and varnishes 1,600 2.46Manufacture of general-purpose machinery 1,600 1.55Manufacture of medical and dental instruments 1,500 1.08Manufacture of prepared meals and dishes 1,500 1.38Manufacture of rubber products 1,400 2.19Manufacture of builders' carpentry and joinery 1,400 0.88Manufacture of plastic packing goods 1,300 1.36

LQ > 1.2

Manufacturing still a key component across GM

31

Manufacturing: 10,400

■ Meat processing: 1,000

■ Plastics: 800

■ General machines: 600


■ Metal fabrication: 1,600

■ Knitted apparel: 1,100

■ Baking: 1,100


■ Baking: 900

■ Metal Treatment: 800

■ Furniture: 800


■ Plastics: 1,200

■ Other textiles: 1,100



■ Basic chemicals: 800

■ Instruments: 500



■ Grains & starches: 1,000

■ Dairy products: 800

■ Printing: 700


■ Baking: 1,300

■ Printing: 1,200

■ Instruments: 600


■ Other food: 2,700

■ Baking: 1,100

■ Plastics: 700


■ Baking: 2,300

■ Plastics: 1,200

■ Furniture: 900


■ Plastics: 1,300

■ Soap & detergents: 700

■ Other textiles: 500

Rochdale

Oldham

Tameside

Stockport

Salford

BoltonBury

Trafford

Wigan

Man

ches

ter

Business services – what does it really do?

32

Business services: 6,500

■ Tax consulting: 1,400

■ Architecture: 800

■ Temp agency : 700


■ Temp agency : 13,300

■ Legal: 10,000

■ Management consulting: 7,700




■ Recruiters: 900



■ Advertising: 800

■ Management consulting: 600


■ Cleaning: 5,300

■ Temp agency: 3,100

■ Management

consulting: 2,300




■ Private security: 5,100


■ Support: 3,500

■ Architecture: 2,400




■ Business support:

1,500

■ Private security: 1,300


■ Legal: 2,200




■ Head offices: 900

■ Tax consulting: 800

■ Architecture: 700

Rochdale

Oldham

Tameside

Stockport

Salford

BoltonBury

Trafford

Wigan

Man

ches

ter

Research questions

Understanding the local data – examining the results, checking the validity and inputting on the baseline position.

The temporary employment agencies – a key component of the labour market, what sectors are the people actually working in?

What does the professional services sector do? Who does it serve, what are the risks / opportunities?

33

Exploring the unemployment story

34

All areas experienced falls in unemployment numbers

35

Source: Claimant Count

Note: excludes Universal Credit

Unemployment, claimant count

0 4,000 8,000 12,000 16,000 20,000

WiganTrafford

TamesideStockport

SalfordRochdale

OldhamManchester

BuryBolton

October 2012

October 2014

Good news for the young, not the long term unemployed

36



Younger unemployed workers have benefited most.

Unemployment halves from 84,000 in October 2012 to 42,000 in October 2014, but long-term unemployment persists.

Unemployment by age

Unemployment duration0

5,000

10,000

15,000

20,000

25,000

Under24

25-29 30-34 35-39 40-44 45-49 50-54 55-59 60+

October 2012

October 2014

0 10,000 20,000 30,000

3 months

3 - 6 months

6 - 12months

1 - 2 years

2+ yearsOctober 2012

October 2014

Elementary workers finding jobs (or falling out of the system?)

37

Management and senior staff haven’t benefited from the fall in un employment.



Unemployment by occupation

Unemployment by age0 10,000 20,000 30,000 40,000

Unknown

Managers

Professionals

Technical

Admin & secretaries

Skilled Trade

Personal service

Customer Service

Plant & Machine operators

Elementary

October 2012

October 2014

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Males Oct '12 Males Oct '14

Females Oct '12 Females Oct '14

Is Greater Manchester close to full employment?

38

77 wards across Greater Manchester currently have an unemployment rate less than 1.7%

Total claimants,

Oct 14 %

% excluding long term claimants

Bolton 4,760 2.7 1.8Bury 2,370 2.0 1.4Manchester 11,430 3.1 2.2Oldham 2,910 2.1 1.3Rochdale 3,220 2.4 1.8Salford 4,070 2.6 1.9Stockport 3,710 2.1 1.6Tameside 2,860 2.0 1.4Trafford 2,150 1.5 1.1Wigan 4,320 2.1 1.4Greater Manchester 41,810 2.4 1.7

Unemployment, Oct 2014



Policy observations

Are skills shortages about to re-emerge, evidence would suggest yes

Impact on migration?

Are the falling numbers of people unemployed reflecting more people in work, or people leaving the system

The long term unemployment problem remains a key challenge

How well do we understand inactivity / hidden unemployment?

39

Commuting flows – how have they changed?

40

Significant in-flows into all labour markets

41

Source: Census

Commuting in all areas rises over the decade except for Manchester

Change 2001-2011(percentage point difference)

Wigan: 28.8%

Bolton: 35.3%

Bury: 45.0%

Rochdale: 38.5%

Oldham: 38.9%

Tameside: 36.4%

Stockport: 46.5%

Manchester: 62.3%

Trafford: 62.8%

Salford: 60.1%

Greater than 2001

Less than 2001

Who takes Manchester’s jobs?

42

2001Manchester 95,200Stockport 27,200Trafford 22,600Tameside 17,800Salford 14,900Bury 13,600Oldham 11,700Cheshire East 10,000Rochdale 9,600Bolton 6,600Wigan 5,300Warrington 3,900High Peak 3,700Cheshire West and Chester 3,000Rossendale 1,400St. Helens 1,300Liverpool 1,200Chorley 1,100Kirklees 1,000Sefton 800

2011Manchester 108,700Stockport 25,500Trafford 24,800Salford 18,900Tameside 17,500Bury 12,100Oldham 11,700Cheshire East 9,400Rochdale 9,300Bolton 7,000Wigan 5,400Warrington 4,200High Peak 3,300Cheshire West and Chester 2,900Liverpool 1,700Rossendale 1,500St. Helens 1,400Kirklees 1,100Chorley 1,100Calderdale 900

Usual place of residence of Manchester’s workforce, top 20

Source: Census

Residents leaving to work….

43

47%

60%

56%

52%

43%

45%48%

53%

60% 44%

Rochdale

Oldham

Tameside

Stockport

Salford

BoltonBury

Trafford

Wigan

Man

ches

ter

Greater than 2001

Less than 2001

Source: Census

% of working residents who work in own area, 2011

A growing population will impact flows

44

Demographic changes 2014-2024

Source: Oxford Economics, ONS

Population (ONS) Population (OE)Bolton 16.4 12.8Bury 10.1 8.5Oldham 9.2 6.3Rochdale 5.3 4.0Stockport 13.9 11.7Tameside 13.4 6.3Trafford 16.3 9.3Wigan 17.6 9.2Manchester 34.0 39.3Salford 23.4 20.2Greater Manchester 159.6 127.6

2014 - 2024 change (000s)

More jobs would be required under ONS population outlook

45

Source: Oxford Economics, ONS

2014 -2024 Job forecast (000s)

Additional jobs required to support ONS

populationBolton 10.9 2.4Bury 5.0 1.1Oldham 3.7 1.3Rochdale 1.8 0.6Stockport 9.8 1.2Tameside 1.8 4.3Trafford 12.7 3.0Wigan 4.3 4.7Manchester 42.6 -2.1Salford 16.6 2.4Greater Manchester 109.2 18.8

Risks and policy considerations

46

Assessing the risks

Upside: wage pressures, skills shortages

Upside: sectoral tapestry – spreading the wealth?

Downside: Debt and interest rate rises

Downside: Austerity, cutting not pruning?

Upside / downside: The competition

Upside / downside: External conditions

47

Policy considerations

Jobs growth – do we believe it, could there be upside pressures?

Are we on top of the business issues, esp. skills?

Demographics – scenario planning, merging your knowledge with the data

Broader church of growth – challenging picking winners?

The supply side impacts of broader growth – skills, land, housing, transport

Vulnerability of jobs – temporary agencies and the elementary workers

How is the public sector today? Are we austerity ready (and will it happen)?

48

Our details and what is available

49

GMFM 2014 – What is available

Economy :

■ Employment;

■ Employees (note: excludes self-employment);

■ GVA;

Demographics:

■ Total population;

■ Broad age groups (young, working age population and elderly);

■ Migration – domestic & international;

Residence based employment/employment rate;

Unemployment level / rate;

Employment by 25 minor occupation groups;

Qualification levels by occupation;

Replacement demand by occupation;

Household numbers;

Household income;

Carbon emissions, and

Demand for commercial floorspace

Note: economy results broken down by broad sector, 50 SIC2007 sectors as well as sectors defined by the New Economy

Oxford Economics

Lagan House

Sackville Street

Lisburn

County Down

BT27 4AB

UK

Tel: 028 9263 5403

Fax: 028 9263 5425

Kerry Houston

Head of Regional Forecasting

Oxford Economics

Email: [email protected]

Tel: 02892 635402

Anthony Light

Associate Director

Oxford Economics

Email: [email protected]

Tel: 0207 803 1419

Contact details:

mailto:[email protected]

mailto:[email protected]

Greater Manchester Forecasting Model 25 th November 2014 Professor Neil Gibson Special Advisor:...

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