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East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October 2012

East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

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Page 1: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

East Midlands Economy: Are we all doomed?

or reasons to be cheerful…

Will Rossiter

Economic Strategy Research Bureau

EMC CPD Event, Melton Mowbray, October 2012

Page 2: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Overview

• The 2008 recession in historical perspective

• The impact of recession on the region

• A perfect storm – fiscal consolidation, the squeeze on real incomes and the Eurozone crisis

• Regional ‘fundamentals’ and long term competitiveness

• Where might the jobs and growth come from?

Page 3: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

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Quarterly Economic Growth in the UK since 1955Quarterly Economic Growth in the UK since 1955

2008Q2 - 09Q25 quarters; 6.28% contraction

1990Q3 - 91Q35 quarters; 2.93% contraction

1980Q1 - 81Q15 quarters; 4.63% contraction

1975Q2 - 75Q3 2 quarters; 1.76% contraction

Source: Based on data from Quarterly National Accounts, Table A2, (National Statistics)

2011Q4 - 12Q2 3 quarters; 1.03% contraction

1973Q3 - 74Q1 3 quarters; 3.25% contraction

1956Q1 - 56Q22 quarters; 0.31% contraction

Average quarterly growth = 0.63%Equivalent to annual growth of 2.54%

Page 4: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Employment and Unemployment

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Source: ONS Crown Copyright, ‘Annual Population Survey’, rolling quarterly estimates, January 2006-December 2006 to January 2010-December 2010.

Page 5: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Unemployment

• Between September 2007 and September 2011:– Nottingham went from 13th highest to 8th highest unemployment rate (out of

378 LADs/UAs);– Mansfield went from 90th to 38th highest and Erewash from 148th to 72nd; and – Unemployment in D2N2 LEP increased by 3.4 pp, the 7th highest increase out of

39 LEPs.

• Oxford, South Buckinghamshire, Cambridge, etc. experienced little increase in unemployment since the recession.

5

Source: ONS Crown Copyright, Model-Based Estimates of Unemployment, from NOMIS, 3rd May, 2012

Page 6: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Real households' disposable income and actual income per head (constant prices) 1997-2012

Source: The economic position of households, Q1 2012, ONS.

Page 7: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

A perfect storm?

• Fiscal consolidation – taxes up, spending down…

• Squeeze on real incomes – taxes up and inflation up (although now moderated)

• Employment insecurity – households paying down debt

• Eurozone crisis – uncertain prospects

• Result – depressed demand – both domestic and international

• No amount of supply side tinkering is likely to correct this

• Must focus on regional ‘fundamentals’

Page 8: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

The East Midlands… Reasons to be cheerful?

“The East Midlands is a region of opportunity. Confidence in its future is founded on its generally diversified economic activity… its past and present level of employment, and the relative absence of the disadvantages associated with massive and congested conurbations.”

East Midlands Economic Planning Council 1969

Historic strengths/sources of competitive advantage?

Where can the jobs come from and what kinds of jobs will deliver the best outcomes for local communities?

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Page 9: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

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East Midlands Spatial Economy

Page 10: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Rebalancing? Manufacturing Employment

Source: ONS Crown Copyright, 2010 ‘Business Register and Employment Survey’. From NOMIS, 3rd May, 2012

Page 11: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

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Productivity (East Midlands GVA per FTE,

UK=100)

Source: Experian Regional Planning Service, 2011

Page 12: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Source: ONS Crown Copyright, 2010. ‘Business Register and Employment Survey’. From NOMIS, 3rd May, 2012Contains Ordnance Survey data © Crown copyright and database right, 2012.

Manufacturing Employment

Page 13: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Rebalancing? Public Sector Employment

• Less affected (as a region as a whole), due to other regions having major public sector concentrations (e.g. Sheffield)

• Public Sector Employment (PSE) fell from 20.1% to 19.2% of total employment in the East Midlands between Q4 2010 and Q4 2011 – loss of 15,000 jobs over the period

Source: ONS Crown Copyright, 2012. Public Sector Employment, Quarter 4 2011. TSO: London. accessed/published 14th March, 2012.

Source: BIS, ABI Employee Job Estimates, 2008

Page 14: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

High growth businesses in Nottingham 2007-2010

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Source: NESTA 2011

Page 15: East Midlands Economy: Are we all doomed? or reasons to be cheerful… Will Rossiter Economic Strategy Research Bureau EMC CPD Event, Melton Mowbray, October

Further information

Will Rossiter

[email protected]

0115 8482875

Economic Strategy Research Bureau

http://www.ntu.ac.uk/nbs/business/specialist_centres/esrb.html

Includes links to recent reports on D2N2 and Nottingham City

emda archive

http://www.tinyurl.com/emdakb