east midlands growth prospectus workshop: an economic perspective will rossiter economic strategy...
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East Midlands Growth Prospectus Workshop: An economic perspective
Will Rossiter
Economic Strategy Research Bureau
Nottingham, December 2012
Overview
•Economic context – recession, depression or zig zag recovery?
•The productivity puzzle
•Regional ‘fundamentals’ and long term competitiveness
•What have we got that ‘ticks Government boxes’?
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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%
Unemployment
ILO unemployment rate seasonally adjusted August-October 2012ONS 12th December 2012
Labour productivity
ONS Labour Productivity Release, September 2012http://www.ons.gov.uk/ons/rel/productivity/labour-productivity/q2-2012/stb-lprod-q212.html
What can we do about it? Concentrate on regional ‘fundamentals’
“..there is international evidence that regions can find a second or third ‘wind’ by understanding their inherent advantages, by examining their historic legacy, by judicious public spending, and in particular by an appreciation of the roles that an educated labour force, high quality infrastructure and in an entrepreneurial/innovative business culture play in influencing regional prosperity.”
Ron Martin 2005
“the case for increased public investment in productive infrastructure is overwhelming today, particularly given low interest rates.”
Martin Wolf, FT 20/09/12, commenting on the productivity puzzle
The East Midlands “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
Economic development is path dependent
Historic strengths/sources of competitive advantage matter
The challenge is to find new and emerging opportunities to which these historic endowments can be applied…
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Rebalancing? Manufacturing Employment
Source: ONS Crown Copyright, 2010 ‘Business Register and Employment Survey’. From NOMIS, 3rd May, 2012
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Productivity (East Midlands GVA per FTE,
UK=100)
Source: Experian Regional Planning Service, 2011
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
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.
Coalition Policy – sectors & ‘rebalancing’
• Advanced manufacturing– Aerospace & automotive– Life sciences
• Knowledge intensive traded services– Information economy– Professional & business services– Higher and further education
• Enabling Sectors– Energy– Construction
Industrial Strategy: UK Sector Analysis, BIS, Sept 2012http://www.bis.gov.uk/assets/biscore/economics-and-statistics/docs/i/12-1140-industrial-strategy-uk-sector-analysis
Further information
Will Rossiter
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