Glynn Jones Thursday 10 th June 2010

Change and RenewalRecession & Recovery in Birmingham & Solihull

The Churches’ Industrial Group Birmingham

Glynn JonesThursday 10th June 2010

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Presentation

1. Economic context

2. The Birmingham and Solihull economy

3. Economic futures

4. Key challenges

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Source: ONS, UK Output, Income & Expenditure, February 2010Notes: Q4 2009 GDP was revised up from +0.1% up to 0.4%; Q1 2010 up from 0.2% to 0.3%Estimates of the recession have been revised downwards from 6% to 6.3%.

The nation has experienced a very deep recession, especially affecting construction and manufacturing….

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Which the West Midlands has been especially vulnerable to

Source: PMI West Midlands, Markit Economics / AWM, May 2010 ONS Labour Market Statistics, May 2010

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However, it is clear that the regional economy has been performing poorly over a much longer period......

Note: GDP and GVA data are NOT directly comparable GDP = GVA + taxes on products - subsidies on productsSource: Office of National Statistics

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With the West Midlands experiencing the lowest average annual growth in GVA per head (2000-07) of any UK region

2. The Birmingham & Solihull Economy

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Birmingham and Solihull make up a quarter of the regional economy

Notes: Birmingham comprises 21% & Solihull 5% of regional GVA

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But recent growth has been driven by the public sector, whilst employment in the private sector has shrunk.....

Source: Work Foundation Analysis 2009

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And the performance of (high-value) financial & business services has been especially poor

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Hence overall growth in GVA per head in Birmingham has been lower than that for most other English core cities….

Source: Work Foundation Analysis, ONS 2009

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And after very strong recent growth there are emerging signs that Solihull’s growth is now ‘plateauxing’

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Birmingham especially has very high rates of worklessness, in part reflecting its demography.....

Source: NOMIS, Annual Population Survey, May 2010

In this graph, ‘Unemployed’ are working age people who are without a job, but who are actively seeking and able to start work. ‘Economically inactive’ are working age people who are neither in employment nor unemployed

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With very high worklessness rates for specific ethnic groups

Source: Annual Population Survey, 2009

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Birmingham home to four of the top five highest claimant proportions in England

Top four claimant proportions in England: Ladywood, Hodge Hill, Sparkbrook & Small Heath, Erdington

North Solihull has 4 SOAs in the top 1% most deprived nationally

3. Economic Futures

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Whilst conditions are improving, forward projections suggest the recovery will be slow (and fragile)

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Initial recovery may be ‘jobless’ with implications for those groups most impacted by recession.....

Source: Labour Force Survey, 2009

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There are longer term issues for the low skilled given the continuous ‘shift’ to a knowledge-based economy

Source: Labour Force Survey, 2008

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Also Birmingham has a very ‘young’ population – creating significant demands for new jobs

Source: NOMIS mid-year population estimates 2009

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However, Birmingham is now vulnerable to public sector cuts, affecting many ‘under-represented’ groups

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This is reflected in the changes in redundancy notifications

Source: Jobcentre Plus, Notified Redundancies, February 2010Note: ‘Other’ includes Agriculture & Fishing and Energy & Water

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Looking forward, whilst Solihull is forecast to see job growth this is largely offset by decline in Birmingham

Source: Economic projections from SQW, The Economic Demand for Housing the West Midlands, 2000-2026

4. Key Challenges

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4 key challenges facing Birmingham & Solihull

1. Achieving a rebalanced economy ?

2. Creating sufficient jobs for :

• those without qualifications

• younger people

• a rapidly growing workforce

3. Maintaining the momentum on regeneration & sustainable communities

4. Assisting communities and individuals to adapt