Annual Business Inquiry: Shirea Profile 2006

Employment Change in Leicester Shire 1998-2004

July 2006

Produced by the Research and Information Team, Chief Executive’s Department, County Hall, County Council

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Reader Information

Document Purpose The purpose of this report is to provide an overview of the structure of the Leicester Shire economy using the ABI dataset.

Title Employment Change in Leicester Shire 1998-2004

Author Ian Neale, Economic Research Officer, Leicestershire County Council

Publication date July 2006

Target Audience Leicestershire County Council Leicester Shire Intelligence Leicester Shire Economic Partnership Business Link Leicestershire Chamber of Commerce

Description This report provides a summary of the sector structure of the Leicester Shire economy and the structural change that has occurred since 1998

Cross Reference Unemployment Bulletin (www.lsint.info) 2001 Census Atlas of Leicestershire

Contact Details Ian Neale Economic Research Officer Research & Information Team Chief Executives Department, Leicestershire County Council County Hall Glenfield Leicestershire, LE3 8RA

Tel: 0116 265 8097 Email: [email protected]

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Employment Change in Leicester Shire 1998-2004 Annual Business Inquiry: Leicester Shire Profile

The data used in this report is from the Annual Business Inquiry (ABI). The data is derived from a annual sample survey of 78,000 UK businesses and is used to provide an estimate of the number of employees. Users should be aware that ABI data presented here are estimates, subject to both sampling errors (arising from the fact that the ABI is a survey, not a census) and non-sampling errors, so it should be treated with some caution, particularly at district and sub-district level where significant variations can arise from one year to the next. The 2004 results are currently provisional and will be subject to revision in December 2006.

The purpose of this report is to provide an overview of the structure of the Leicester Shire economy using the ABI dataset. The ABI provides a useful tool in analysing the structure of the local economy and in making comparisons with other economies and tracking structural changes over time. This summary report is an overview and readers are asked to consider further areas of more in-depth research using the ABI that would benefit the local economy.

Table 1: Key Statistics

Leicester Shire Leicester City Leicestershire County

All people employed 408,200 158,100 250,100 1,804,800

Males employed 209,350 76,000 133,350 911,500

Females employed 198,850 82,150 116,700 893,300

Number of business units 35,150 10,450 24,700 154,600 Business size 1-10 employees 83.2% 79.4% 84.8% 82.7% 11-49 employees 13.1% 15.8% 11.9% 13.6% 50-199 employees 2.9% 3.8% 2.6% 3.1% 200 + employees 0.8% 1.0% 0.6% 0.7% Source: ABI, 2004

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The Leicester Shire economy employs just over 408,000 people. Figure 1: Industrial structure of the Sub-region, regional and national economy Figure 1 and table 2 show the industrial structure of the Leicester Source: ABI, 2004 Shire economy. The overall profile of the Leicester Shire sub Distribution, hotels and restaurants (SIC G,H) 30.0 regional economy is very similar to the structure of the regional 25.0 economy. When compared to the structure of the national economy Agriculture and fishing (SIC A,B) Public administration,education & health (SIC L,M,N) Leicester Shire employs a higher proportion of people in 20.0 manufacturing and a lower proportion of people in the Banking and Public Administration sectors. This indicates that Leicester Shire as 15.0 a sub region still has more of a reliance on traditional 10.0 manufacturing employment than the national average. Energy and water (SIC C,E) 5.0 Manufacturing (SIC D) When analysing the difference within the sub-region the Leicestershire County economy has an even more pronounced 0.0 reliance on manufacturing employment than the regional and national economy, with one In five jobs in Leicestershire still in the Manufacturing sector. The distribution, hotels and restaurants sector also plays a more significant employment role in the Construction (SIC F) Banking, finance and insurance, etc (SIC J,K) Leicestershire economy than it does in the Leicester City, regional and national economies.

Other services (SIC O,P,Q) Transport and communications (SIC I)

East Midlands and Wales Leicester Shire Table 2: Industrial Breakdown of the sub-region, region and nation, 2004 (Employment proportion by sector) Industry Leicester Shire Leicestershire Leicester City East Midlands England and Wales Total 408,200 250,100 158,100 1,789,500 23,551,100 1 : Agriculture and fishing 0.3 0.6 0.0 0.4 0.2 2 : Energy and water 0.9 1.0 0.9 0.8 0.5 3 : Manufacturing 17.8 19.0 15.8 17.6 12.1 4 : Construction 4.2 4.6 3.5 4.8 4.5 5 : Distribution, hotels and restaurants 26.0 28.6 21.9 25.3 25.0 6 : Transport and communications 6.5 8.1 3.9 5.7 6.0 7 : Banking, finance and insurance, etc 16.6 15.8 17.8 15.4 20.3 8 : Public administration,education & health 23.4 18.2 31.7 25.8 26.3 9 : Other services 4.4 4.3 4.5 4.4 5.1 Source: ABI, 2004 4 Annual Business Inquiry: Leicester Shire Profile 2006

Map 1: Proportions of employment in the Banking, Map 2: Proportions of employment in the finance and insurance sector by SOA Distribution, hotels and restaurants sector by SOA Source: ABI, 2004 Source: ABI, 2004

Figure 1 identified that the key sectors in terms of employment in Leicester Shire are; the Distribution, Hotels and Restaurants sector, the Public Administration, Education and Health sector, the Manufacturing sector and the Banking, Finance and Business Services sector. Maps 1-4 show the distribution of employment in these key sectors across Leicester Shire. The data has been mapped by Lower Super Output Area (SOA) and shows the proportion of workplace based employment by sector. i.e. where the jobs are located not where the employees actually live.

Banking, Finance and Business Services (map 1) • The highest proportions of employment in this sector are found to the west of the County, in the Blaby District and the Borough of Hinckley and Bosworth. • Two SOAs within the Pastures ward and the Enderby and St Johns ward in Blaby employ over 4,500 people in this sector. • The urban centres of Leicester City, Ashby and Market Harborough have high proportions of employment in the Banking sector.

Distribution, Hotels and Restaurants (map 2) • Areas of employment are focused along the M1 and the M69 motorways networks. • Magna Park in the Ullesthorpe ward in Harborough and areas to the North and East of Blaby are key employment locations. • Small, dispersed locations of employment exist in Leicester City. 5 Annual Business Inquiry: Leicester Shire Profile 2006

Map 3: Proportions of employment in the Map 4: Proportions of employment in the Public administration, Manufacturing sector by SOA education and health sector by SOA Source: ABI, 2004 Source: ABI, 2004

Manufacturing (map 3) • Manufacturing employment is more spread across the region, but with a focus to the North of Leicestershire. • 43 SOA’s within Leicester Shire have more than 50% of their employment in the manufacturing sector. • There are high concentrations of manufacturing employment in Leicester City, in areas such as Abbey, Rushey Mead, Latimer, Belgrave, Coleman and wards.

Public Administration (map 4) • This sector is highly clustered in Leicester City and on the fringe of Blaby District and Oadby and Wigston Borough. • Areas of Charnwood, in particular Shepshed, Loughborough and Quorn also have high proportions of employment in this sector.

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The ABI data allows analysis of numbers of business units and Map 5: Ratio of Business Units to Number of Employees number of employees by ward. The ward of Castle which incorporates by ward has by far the highest number of employees Source: ABI, 2004 (63,000) and the highest number of workplaces (2,900). Other areas of Leicestershire that employ high numbers are; • Ullesthorpe ward (Magna Park) - 7,400 • Hinckley Clarendon ward (Hinckley town centre) - 6,400 • Enderby and St Johns ward - 10,200 • Castle Donnington ward ( and Pegasus Business Park) - 10,400 • Loughborough Leymington and Loughborough Southfileds (Loughborough town centre) - 20,400 • ward - 12,900 • Abbey ward - 11,200 • Rushey Mead ward - 8,200

By mapping the number of workplaces and comparing this with the distribution of the number of employees across Leicester Shire we are able to make some assumptions regarding business size. Map 5 shows a ratio of Number of Employees in a ward to the number of Business Units in a ward. The darker areas on the map show wards with a high number of employees in relation to the number of workplaces in the Figure 2: Actual change in the number of employees between 1998 and ward. 2004 for Leicestershire districts and Leicester City (workplace based)

For example the ward of Ullesthorpe is the location of the Magna Park 1998-2004 Change 10,000 business park. This ward has a large number of employees (7,400) but North West Leicestershire a low number of workplaces (160), indicating that there are some very 8,000 large companies on the site. The large number of employees may also be explained by the shift working that takes place on the Magna Park 6,000 site. The ward of Enderby and St Johns, home to large firms such as Harborough Next Plc, also provides a large number of employees in relation to the 4,000 Blaby number of workplaces. Figure 2 displays the actual change in the numbers of employees by 2,000 Hinckley and Bosworth Melton district and Leicester City between 1998 and 2004. The year 1998 has Employees of Number 0 been chosen as it is the first year for when ABI data is available. Over the period, North West Leicestershire has seen the number of people -2,000 Charnwood employed in the district rise by 8,800 people. Whereas over the same Oadby and Wigston period the number of people employed in Charnwood and Oadby and -4,000 Leicester City Wigston has fallen by 1,300 and 2,800 respectively. Source: ABI, 2004 7 Annual Business Inquiry: Leicester Shire Profile 2006

Table 3: Actual changes in the numbers employed in the key sectors in Leicester Shire between 1998 and 2004. Leicestershire Leicester City Leicester Shire 1998-2004 % 1998-2004 1998-2004 % 1998-2004 1998-2004 % 1998-2004 1998 2004 1998 2004 1998 2004 Change Change Change change Change change Agriculture and fishing 1,300 1,400 7.7% 100 0 0 0.0% 0 1,300 1,400 7.7% 100 Energy and water 1,700 2,400 41.2% 700 2,000 1,400 -30.0% -600 3,700 3,800 2.7% 100 Manufacturing 65,400 47,500 -27.4% -17,900 40,800 25,000 -38.7% -15,800 106,200 72,500 -31.7% -33,700 Construction 15,500 11,400 -26.5% -4,100 5,700 5,600 -1.8% -100 21,200 17,000 -19.8% -4,200 Distribution, hotels and restaurants 53,900 71,500 32.7% 17,600 33,100 34,600 4.5% 1,500 87,000 106,100 22.0% 19,100 Transport and communications 18,600 20,300 9.1% 1,700 6,100 6,100 0.0% 0 24,700 26,400 6.9% 1,700 Banking, finance and insurance, etc 30,100 39,400 30.9% 9,300 24,000 28,200 17.5% 4,200 54,100 67,600 25.0% 13,500 Public administration, education 43,900 45,400 3.4% 1,500 44,500 50,200 12.8% 5,700 88,400 95,600 8.1% 7,200 Other services 7,500 10,800 44.0% 3,300 5,100 7,100 39.2% 2,000 12,600 17,900 42.1% 5,300 TOTAL 237,900 250,100 12,200 161,300 158,200 -3,100 399,200 408,300 9,100 Source: ABI, 2004 Table 3 shows a breakdown of the actual changes in the numbers Figure 3: Trend between 1998 and 2004 in the changes in the numbers employed in the key sectors in Leicester Shire between 1998 and 2004. employed in the key sectors in Leicester Shire For the sub-region the two sectors that have declined in terms of numbers employed are the Manufacturing and Construction sectors. By far the largest decline has been in the manufacturing sector where over 33,000 106,200 106,100 jobs have been lost since 1998. The decline of 4,200 jobs in the 88,400 95,600 construction sector was nearly entirely made up of a reduction of 4,100 87,000 72,500 jobs in Leicestershire County. 67,600 The Distribution, Hotels and Restaurants sector and the Banking, 54,100 Finance and Insurance sector have seen the largest growth in employment since 1998. The major growth in the Distribution sector has been dominated by the growth of 17,600 employees in Leicestershire 24,700 26,400 21,200 17,000 County. 12,600 17,900 Figure 3 shows the trend over time for the changes in employment for the main industrial sectors in Leicester Shire. In 1998, the manufacturing 1998 1999 2000 2001 2002 2003 2004 sector played the major employment role but since the year 2000

Manufacturing (SIC D) Construction (SIC F) employment in this sector has steadily declined to the position where Distribution, hotels and restaurants (SIC G,H) Transport and communications (SIC I) Banking, finance and insurance, etc (SIC J,K) Public administration,education & health (SIC L,M,N) Manufacturing employment is now only the third main sector in the Other services (SIC O,P,Q) Leicester Shire economy. A more detailed sector breakdown of the changes in levels of Source: ABI, 2004 employment in Leicester Shire is analysed in figure 6 and table 4 on page 7. 8 Annual Business Inquiry: Leicester Shire Profile 2006

Figure 4: Employment by industrial structure in 1998. Leicester Shire and Figure 5: Employment by industrial structure in 2004. Leicester Shire and England and Wales (%) England and Wales (%)

Source: ABI, 2004

In 1998, employment in the Leicester Shire economy was dominated by three main sectors, Manufacturing, Distribution, hotels and restaurants and Public administration, education & health (figure 4). Manufacturing played a less dominant role in the national economy making up 16.9% of all employment compared to the 26.6% in the Leicester Shire economy. The banking finance and Business Services sector was under-represented in the Leicester Shire economy in 1998 when compared to the national economy. From 1998 to 2004 there has been considerable structural change in the Leicester Shire economy. The manufacturing sector has shrunk from making up 26.6% of the economy in 1998 to making up 17.8% in 2004. The reduction in the prominence of the manufacturing sector is a trend that has been seen nationally, although the impact has been more acute at a sub-regional level because of the major role the manufacturing sector has traditionally had within the East Midlands. The growth sectors in the Leicester Shire economy over the 1998-2004 period have been in Distribution, Hotels and Restaurants and the Banking Finance and Insurance sector. The next page looks at a more detailed sector breakdown to establish which specific sub-sectors have undergone the most change.

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Figure 6: Percentage change in employment service categories between 1998 and 2004 for Leicester Shire Table 4: Actual change in employment service categories between 1998 and 2004 for Leicester Shire

Other service activities 1998-2004 1998 2004 Wholesale/retail distribution; repair Change Financial and business services

Health and social work Wholesale/retail distribution; repair 67,400 85,400 18,000 Electricity, gas and water supply Financial and business services 54,100 67,600 13,500 Manuf chemicals and man-made fibres Other service activities 12,600 17,900 5,300 Agriculture, forestery and fishing Health and social work 36,600 41,200 4,600 Manuf non-metallic mineral products Public services,admin and defence 51,800 54,300 2,500 Transport storage and communications Transport storage and communications 24,700 26,400 1,700 Hotels and catering

Public services,admin and defence Hotels and catering 19,500 20,700 1,200

Processing of energy producing materials Manuf chemicals and man-made fibres 3,600 3,900 300 Manuf food, drink and tobacco Electricity, gas and water supply 3,000 3,300 300 Manuf pulp,paper/products; printing etc Manuf non-metallic mineral products 2,700 2,900 200 Manuf timber,rubber,plastic & other Agriculture, forestery and fishing 1,300 1,400 100 Construction Processing of energy producing materials 0 0 0 Metal manufacture and fabrication

Manuf optical and electrical equipment Mining of energy producing materials 200 100 -100

Manuf transport equipment Mining of non-energy producing materials 500 300 -200 Manuf machinery and equipment nec Manuf food, drink and tobacco 11,000 10,300 -700 Mining of non-energy producing materials Manuf pulp,paper/products; printing etc 8,600 7,600 -1,000 Mining of energy producing materials Manuf transport equipment 4,500 3,200 -1,300 Manuf textiles/products,leather/products Manuf timber,rubber,plastic & other 14,000 12,100 -1,900 -80.0 -60.0 -40.0 -20.0 0.0 20.0 40.0 60.0 Manuf optical and electrical equipment 9,200 6,700 -2,500 % Change 1998-2004 Metal manufacture and fabrication 10,600 8,000 -2,600 Source: ABI, 2004 Manuf machinery and equipment nec 11,100 7,200 -3,900 Figure 6 and table 4 show a more detailed 23 point sector breakdown. This list has Construction 21,200 17,000 -4,200 been developed by the Office of National Statistics to provide a further classification Manuf textiles/products,leather/products 30,900 10,500 -20,400 of sub-sectors. Source: ABI, 2004 Figure 6 shows the percentage change in each of the sectors over 1998-2004, for comparison table 4 shows the actual changes in the number of employees in each of these sectors over the same time period. The textiles sector has experienced the largest decline both in percentage and real terms. The number of people employed in the textiles sector has reduced by 66% between 1998 and 2004, which in real terms is a loss of over 20,000 jobs. However, the data shows that many other sections of manufacturing industry have also declined, for example over 6,000 jobs have been lost in the ‘metal manufacture’ and the ‘manufacture of machinery’ sectors. The three main growth sectors, in terms of employment, in the Leicester Shire economy over the 1998-2004 period have been the ‘Other services’ sector, ‘Wholesale/ retail distribution; repair and the ‘financial and business services’ sector. In the Leicester Shire Economy a clear distinction can be seen between service sector industries that have generally experienced growth and the declining manufacturing sector. 10 Annual Business Inquiry: Leicester Shire Profile 2006

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Leicestershire County Council Chief Executive’s Department County Hall, Glenfield, Leicestershire LE3 8RF

Further details available on the web: www.leics.gov.uk/statistics

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