The North East Economy: A great place to invest

Overview of North East LEP Area

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000

34,000

36,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

Poun

ds

England North East North West Yorkshire and The HumberEast Midlands West Midlands East LondonSouth East South West

London

North East

England

95

100

105

110

115

2009 2010 2011 2012

GVA

/hou

r wor

ked.

Bas

e 20

09=1

00

North East LEP England exc London London North East region

Fastest growing productivity…

…and median wages are very competitive

Labour productivity (GVA per hour worked) growing at fastest rate in the country

(FT only)

…and lowest median wage in England

High growth in GVA per head…

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2010 2011 2012 Average of 3 years

North East LEP England exc London London North West

GVA per head growing among highest rates in the country…

…while births and deaths of businesses (as % of registered

businesses) are on a par with the national figures...

2009 2010 2011 2012NELEP 10% 9% 11% 11%

England exc London 10% 9% 11% 11%

2009 2010 2011 2012NELEP 12% 11% 10% 11%

England exc London 12% 10% 10% 11%

Deaths of registered enterprises (as % of active ones)

Births of registered enterprises (as % of active ones)

… and survival rates are a healthy as the rest of the country

90

100

110

120

130

140

150

160

170

180

190

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

North East LEP England except London & SE UK

Source: Prepared with data from ONS, release 12 December 2013

…and longer run growth, which shows the North East is catching up with the rest of the country

Index of current values of Gross Value Added (GVA). Base 2000=100

But the North East is also a great place to be an employee:

For someone on median income, real wages (which account for cost of living) are among the highest in the country

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

London South West South East East of England

West Midlands

Wales East Midlands

Yorkshire & The

Humber

North East North West

Median income of full time employees, expressed in North East prices, 2012

Ratio of 90th to 10th percentile of hourly pay (all employees); 2013

And the North East has some of the most equal distribution of wages in the country

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.6

4.8

5.0N

orth

Eas

t

York

sh&

Hum

b

East

Mid

land

s

Wes

t Mid

land

s

Sout

h W

est

Nor

th W

est

East

Sout

h Ea

st

Lond

on

0

2,000

4,000

6,000

8,000

10,000

12,000

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

UK North East North West

Yorkshire and The Humber

East Midlands

West Midlands

East London South East South West

England

£s per headMillion £s

Imports (left) Exports (left)

Imports/head (right) Exports/head (right)

Source: HMRC, figures released 6 march 2014

Foreign trade in goods: Only English region with consistent positive trade balance in goods every year 2010-13

Imports and exports, goods, 2013

However: North East is lowest exporter and importer of goods On a per capita basis, exports perform above national average.

12,04912,875

16,07716,978

19,125 19,286

21,937

0

5,000

10,000

15,000

20,000

25,000

Northum'd Durham North East LEP

Sunderland England exc London

Tyneside England

73% of England

Source: Prepared with data from ONS, release 12 December 2013

Gross Value Added per person, 2012 (current basic prices)Current £

However, levels are still a way off and challenges remain…

Source: Prepared with data from ONS

Differences persist for both employment…

Source: Prepared with data from ONS

…and unemployment

Number of businesses in the UK private sector per 10,000 adults, start of 2013

Taken from BIS (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254552/13-92-business-population-estimates-2013-stats-release-4.pdf)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0

100

200

300

400

500

600

700

Wal

es

Nor

th E

ast

York

&H

umb

Lond

on

Nor

th W

est

Sout

h W

est

Wes

t Mid

East

Mid

Engl

and

Sout

h Ea

st

East

£ per business£ per person

Per person (left axis)

Per business (right axis)

Low R+D per capita, better on a per business basis….

Taken from the North East Independent Economic Review, except far right bar (prepared with data from BIS)

Demographic data provide important context

Not enough young people% of total population who are employees is similar to the rest of the country excluding LondonSeemingly too many inactive amongst the working age population

Key observations:

Jan13-Dec13, A

nnual Population S

urvey (ON

S)

All 0-15, 17%

All 0-15, 19%

Employed, 38.9%

Employed, 39.5%

Self-

empl

, 4%

Self-

empl

, 6%

Une

mp,

5%

Une

mp,

4%

Inactive, 17%

Inactive, 14%

Acti

ve, 1

%A

ctive

, 2%

Inactive, 17%

Inactive, 16%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

North East LEP

England exc

London

% of population

Aged 16-64, 63% Aged 65+, 18%Aged 0-16, 19%

Aged 16-64, 65% Aged 65+, 18%Aged 0-16, 17%

60% 94%26%7%As % of age group: 7% 6%

As % of age group: 62% 10% 6% 22% 90%10%

But why inactive?

…due to greater proportion of long-term sick

Student, 25%

Student, 25%

looking after family/home, 22%

looking after family/home, 26%

tem

pora

ry s

ick,

3%

tem

pora

ry s

ick,

2%

long-term sick, 28%

long-term sick, 22%

disc

oura

ged,

1%

disc

oura

ged,

1%

retired, 15%

retired, 16%

othe

r, 7

%ot

her,

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

North East LEP

England exc London

% of people in the age group

Breakdown of inactives in the 16-64 year old group

Jan13-Dec13, Annual Population Survey (ONS)

Age

16-1

9, 0

%Ag

e 16

-19,

0%

Age 20-49, 13%

Age 20-49, 11%

Age 50-64, 14%

Age 50-64, 10%

0% 5% 10% 15% 20% 25% 30%

NELEP, 28%

England Exc London, 22%

% of people aged 16-64

Age breakdown of long-term sick inactives in the 16-64 year old group

But why long term sick? Is it the mines legacy?

Age breakdown shows even the younger in the North East have a greater propensity to be long-term sick… so can’t be mines

2011 Census, ONS

Possible hint from ONS…

More recent data shows dramatic changes… benefits?

20

22

24

26

28

30

32

Mar

-May

199

2O

ct-D

ec 1

992

May

-Jul

199

3D

ec-F

eb 1

994

Jul-S

ep 1

994

Feb-

Apr

199

5Se

p-N

ov 1

995

Apr

-Jun

199

6N

ov-J

an 1

997

Jun-

Aug

199

7Ja

n-M

ar 1

998

Aug

-Oct

199

8M

ar-M

ay 1

999

Oct

-Dec

199

9M

ay-J

ul 2

000

Dec

-Feb

200

1Ju

l-Sep

200

1Fe

b-A

pr 2

002

Sep-

Nov

200

2A

pr-J

un 2

003

Nov

-Jan

200

4Ju

n-A

ug 2

004

Jan-

Mar

200

5A

ug-O

ct 2

005

Mar

-May

200

6O

ct-D

ec 2

006

May

-Jul

200

7D

ec-F

eb 2

008

Jul-S

ep 2

008

Feb-

Apr

200

9Se

p-N

ov 2

009

Apr

-Jun

201

0N

ov-J

an 2

011

Jun-

Aug

201

1Ja

n-M

ar 2

012

Aug

-Oct

201

2M

ar-M

ay 2

013

Oct

-Dec

201

3

Inac

tivi

ty r

ate

(%)

Inactivity rate Those not working or looking for a job among the 16-64 year olds

Inactivity North East region Inactivity UK

Qualification profile – North East LEP vs. Englandis it an age issue?

Source: Prepared with data from ONS

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

No Quals NVQ1 NVQ2 NVQ3 NVQ4+

Aged 16-24

No Quals NVQ1 NVQ2 NVQ3 NVQ4+

Aged 25-49

North East LEP

England except London

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

No Quals NVQ1 NVQ2 NVQ3 NVQ4+

Aged 50-64

Data for 2013

Our young are achieving really great GCSEs:

No one else in the country gets a greater % of students achieving 5 A*-C GCSEs. The North East has been topping this table since 2008….

Region 2005 2006 2007 2008 2009 2010 2011 2012North East 53.5 57.4 60.6 66.5 72.9 79.5 84.7 88West Midlands 54.2 56.4 59.3 64.1 70.1 77.9 83 85.5North West 53.9 56.6 60.3 65.4 71 77.7 82.2 84.2London 55.3 58.3 60.9 65 71.2 77.7 82 84.1Yorkshire and The Humber 51.3 54.5 57.8 62.1 69.2 76.8 81.5 84.1East Midlands 52.5 55.4 57.9 63.1 68.9 75.3 80 82.7South East 57.6 59.8 62 66 70.2 75.8 79.3 82East of England 56.6 59.3 61.2 64.7 69 74.3 78 80.6South West 56.1 58.2 59.5 63.6 67.9 72.7 76.8 79.8England 56.3 59 61.4 65.3 70 75.4 79.5 81.8

Which, combined with our productivity and income advantages means a greater future for those in employment in the North East

Wages catching up… productivity gains?

82% 84% 86% 88% 90% 92% 94%

20 percentile

Median

80 percentile

Year 2002

Year 2013

North East weekly gross pay as % of England (all workers)