EM3 Economy and Labour Market Dashboard March
Enterprise M3 Economy, Labour Market and Skills Dashboard
EM3 SAP and EM3 Board Meetings – March 2021 HEADLINES • High business density in Enterprise M3 but sluggish business growth - business activity above the average in late December but business financial performance and the economy affected severely last year.
• Strong performing labour market in Enterprise M3 takes the hit but the impact on the labour market relatively subdued - largely thanks to government policy (job support schemes).
• Labour intensive consumer services and construction in Enterprise M3 affected the most – decrease in demand for upper intermediate skills accompanied by the increase in demand for lower intermediate skills and higher skills (professional occupations).
• The greatest impact to date has been on self-employed and non-permanent work and young people.
• 3rd lockdown led to a sharp fall in output but businesses have become better at adapting to lockdowns – the impact on GVA in Q1 2021 much smaller than in Q2 2020; released pent-up demand and government spending to drive economic growth this year.
• Jobs demand heavily subdued at the start of 2021 - the strongest skills demand in nursing and care and several professional occupations and the weakest in hospitality, retail and elementary occupations. BUSINESS & ECONOMY BUSINESS ACTIVITY IN ENTERPRISE M3 ABOVE THE AVERAGE IN LATE DECEMBER
Trading Status Survey evidence suggests that about 3 in every 4 (% of single site businesses currently trading) business in Enterprise M3 were trading in mid-to- 90 % 14 - 29 December 2020 late December 2020. 85 80 Enterprise M3 had a higher proportion of 75 South East businesses trading than the South East or the 70 UK. 65 UK 60 The economy seems to have become better at 55 adjusting to periods of lockdown 50 West Surrey North Hampshire Central Hampshire • some 74% of UK businesses were trading in early March 2021 Source: ONS BICS Survey (2021) West Surrey (Surrey Heath, Woking, Guildford, Waverley, Spelthorne, Runnymede Elmbridge); North Hampshire (Basingstoke & Deane, Hart, Rushmoor); Central Hampshire (Test Valley, Winchester, East Hampshire, New Forest*). UNPRECEDENTED IMPACT ON FINANCIAL PERFORMANCE OF ENTERPRISE M3 BUSINESSES Business resilience – cash reserves A large proportion of businesses in Enterprise M3 (% with no or < 3 months cash reserves*) experienced a decrease in turnover (sales) in mid-to-late December. 50 % 14 - 29 December 2020
40 Falling sales had a significant impact on the UK financial performance of businesses in Enterprise M3. 30 South East
• Over a third of Enterprise M3 businesses had 20 less than three months cash reserves in mid- to-late December. 10
rd The 3 national lockdown is likely to worsen 0 cashflow position which could impact on West Surrey North Hampshire Central Hampshire business investment. Source: ONS BICS Survey (2021); *% of single site businesses
West Surrey (Surrey Heath, Woking, Guildford, Waverley, Spelthorne, A range of Business Support measures Runnymede Elmbridge); North Hampshire (Basingstoke & Deane, Hart, announced in March 2021 Budget. Rushmoor); Central Hampshire (Test Valley, Winchester, East Hampshire, New Forest*). SLUGGISH BUSINESS GROWTH IN ENTERPRISE M3 PRE-PANDEMIC – BUT HIGH BUSINESS DENSITY MATTERS Business stock, density and growth in 2020 Enterprise M3 has a large number of businesses (as of mid March 2020) and one of the highest business densities in the
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2020 saw the sharpest economic contraction in over 300 years. Estimated growth in GVA in 2020 • UK economy contracted by 9.1% in GVA -6 UK terms. Enterprise M3 -7 Official estimates for Enterprise M3 are not available - preliminary estimates for 2019 from -8 ONS due in May. -9 -9.0% A local estimate of the impact on EM3 ranges from: -10 -9.1%
-11 • -9% (based on UK sectoral growth) -10.5% To 2020 2020 • -10.5% based on (regional sectoral growth in Q1 and Q2 and national growth in Q3 andQ4 Source: ONS (2021) and EBIS 2021 estimate for Em3 economy
Does not factor-in likely greater resilience in Enterprise M3 as seen during the 2008/9 recession. CONSUMER SENTIMENT STARTED TO IMPROVE LATE LAST YEAR
Consumer sentiment in Enterprise M3 recovered in the Autumn judging by the number of residential Monthly house sales in Enterprise M3 property transactions. 2.4 sales volume 2.2 Consumer sentiment in the UK improved at the 2.0 strongest pace in eight years in early December Enterprise M3 1.8 before decreasing in January following the introduction of 3rd national lockdown. 1.6
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h t early 2021. 0.8 1st lockdown 0.6 Consumers ready to release their pent-up demand Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct for goods and services as soon as the economy 2019 2020 reopens. Source: ONS (2021) LABOUR MARKET & SKILLS HEADLINE EMPLOYMENT TAKES THE HIT BUT THE IMPACT TO DATE HAS BEEN FAR MORE MUTED THAN ON ECONOMIC OUTPUT
Enterprise M3 has one of the strongest labour Employment rate in the year to 2020 markets in the country – employment rate at and annual % change around 80% in the year to September 2020. 81 Enterprise In terms of the impact on the economy this was M3 80 the worst recession in over 300 years but the Coast to Capital impact on the labour market has been more ) 79 TV Berkshire Hertfordshire
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Source: ONS (2021) SHARP FALL IN SELF-EMPLOYMENT AND NON-PERMANENT EMPLOYMENT IN ENTERPRISE M3
The fall in overall resident employment in Enterprise M3 to date has been driven entirely by Change in employment in Enterprise M3 the fall in self-employment. (year to September 2020 working-age) 2 • Males accounted for close to 90% of the fall in 0 0.03% self-employment in Enterprise M3 -2 (concentrations of males in some sectors like -4 construction).
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-8 o h • The number of employee females decreased t on the year (concentrations of females in -10 labour intensive consumer services). -12 -12% -14 The fall in non-permanent employment in -16 Enterprise M3 has been about twice as fast as Employees Self-employed the fall in the overall employment (typically happens in recessions) Source: ONS (2021) ENTERPRISE M3 SEES A RELATIVELY SHARP DECREASE IN EMPLOYMENT AMONG YOUNG PEOPLE
Young people in Enterprise M3 and across the % change in employment by age country tend to be disproportionately affected in (year to September 2020) recessions. 0 This recession is no different – employment -2 among young people in Enterprise M3 decreased -4 by about 9 times faster than the average -6 employment. -8
Impact to date largely explained by -10 concentrations of young people employed in -12 labour intensive consumer facing sectors (hospitality, non-essential retail, accommodation -14 etc.). -16 aged 16-64 aged 16-24 aged 20-24 aged 35-49 aged 65+ Young people often have less security at work e.g. non-permanent (temporary) contracts, work Source: ONS (2021) fewer hours etc. EMPLOYMENT IN LABOUR INTENSIVE CONSUMER FACING SECTORS AFFECTED THE MOST Annual growth in resident employment by broad industry – Enterprise M3 (year to September 2020, %)
Manufacturing
Construction
Distribution, hotels & restaurants
Transport & communication
Finance & insurance
Public admin, education & health
Other services % change -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14
Source: ONS (2021) • -22,800 in distribution, hotels & restaurants • + 26,200 in broad public sector • -7,500 in construction SHARP FALL IN DEMAND FOR UPPER-INTERMEDIATE AND ELEMENTARY SKILLS, RISE OF LOWER-INTERMEDIATE AND PROFESSIONALS
Annual growth in resident employment by major occupational group – Enterprise M3 (year to September 2020, %) Managers, directors & senior officials Professional occupations high-skilled occupations
Associate prof. & technical occupations upper-intermediate Admin. & secretarial occupations occupations Skilled trades occupations Caring, leisure & other serv ice occup. Sales & customer serv ice occupations lower-intermediate Process, plants & machine operativ es occupations
Elementary occupations annual % change -20 -16 -12 -8 -4 0 4 8 12 16 20
Source: ONS (2021) • Upper intermediate: -22,300 • Professional occupations: science, research, • Lower intermediate: +11,700 engineering & technology (+), health (+), teaching & • Professional: +7,700 education (+), business, media & public service (-) SHARP INCREASE IN UNEMPLOYMENT BUT THE LOWEST LEP UNEMPLOYMENT RATE IN THE AREA
Sharp increase in unemployment in Enterprise Unemployment rates - February 2021 M3 area over the past 12 months. and annual pp change in the rate
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F Enterprise M3 Some will not be eligible for unemployment- 4.0 related benefits and some will drop-out of the 2.4 2.8 3.2 3.6 4.0 4.4 4.8 5.2 5.6 labour market (become economically inactive). change in unemployment (percentage points) since February 2020
Source: ONS (2021) SHARP INCREASE IN YOUTH UNEMPLOYMENT Unemployment rates by age group – February 2021 (Claimant Count Unemployment)
Working age (16-64)
Aged 16-24
Aged 18-24
Aged 25-49
Aged 50+
Aged 55+ % 1 2 3 4 5 6 7 8 9 10
Enterprise M3 South East England UK Source: ONS (2021) • Unemployment among young people increased by about • Unemployment across all age groups 4.4 percentage points (pp.) to 6.2% in February 2021 below regional and national averages. • Increase in all age unemployment was 2.8 pp. to 4.1% UNEMPLOYMENT ACROSS ENTERPRISE M3 WELL BELOW REGIONAL AND NATIONAL AVERAGES
Monthly change in unemployment – February 2021 Unemployment rates – February 2021 (Claimant Count Unemployment) (Claimant Count Unemployment)
• Unemployment in February increased in all • Unemployment on this measure across all but one local authorities in Enterprise M3 but the local authority district in Enterprise M3 stand below numbers are not adjusted for seasonal factors. both, the UK and South East averages. LARGE NUMBER OF JOBS IN ENTERPRISE M3 DIRECTLY SUPPORTED BY GOVERNMENT
Relatively muted impact on the labour market is Jobs directly supported by the Government explained by an unprecedented government (Enterprise M3 – June 2020 to Jan 2021) intervention in the labour market. 300 259,700 furloughed SEISS Large numbers of jobs in Enterprise M3 directly 250 supported by government (about 20% more in 200 January 2021 than in December 2020). 152,400 150 128,500 47,000 Young and older workers (55+) more likely to be 118,500 100,700 40,300 (60%) furloughed than other age groups. 100 (52%) 105,400 50 (15%) People in labour intensive consumer services 88,200 (12%) (hospitality, arts etc.) more likely to be furloughed 0 than people employed in professional services. June Aug Oct Dec Jan
Source: HMRC (2021) Job Support Schemes have been extended until the end of September 2021 (March 2021 Budget). DEMAND FOR LABOUR AND SKILLS AT THE START OF 2021 SHARP FALL IN BUSINESS ACTIVITY (OUTPUT) AT THE START OF 2021 BUT BUSINESSES HAVE BECOME BETTER AT ADAPTING TO LOCKDOWNS
The 3rd national lockdown led to a sharp fall in business activity (output) in the South East in Business activity (output) and new orders January 2021 and the sharpest contraction in the (South East England) volume of new orders since May 2020.
Most businesses have been allowed to operate and the economy seems to have become better at adjusting to periods of lockdowns
• Output and New Orders fell in February but at a much slower pace than in January.
The impact on economic growth in the 1st quarter of 2021 is going to be much smaller than in the 2nd quarter of last year.
Source: Markit (2021) Released pent-up demand and government spending to drive economic growth this year. RENEWED DOWNTURN IN HIRING ACTIVITY IN ENTERPRISE M3 AT THE START OF 2021
% change in online job postings Online job postings relative to last year (December to January) (30 days to 24th February) 5 54 Enterprise M3 South East 4 52 3 50 Enterprise M3 2020 2 48
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t -24% -1 44 -1% -1.2% -2 42 Enterprise M3 2021 -3 40 -4 -5 38 Dec Jan Dec Jan Jan 21 Feb 21
Source: HMRC (2021)
• Jobs demand in Enterprise M3 weakened • A large gap in demand for labour relative to further in January. last year’s levels. THE FALL IN JOB DEMAND IN ENTERPRISE M3 SIMILAR TO OTHER LEPS IN THE AREA
Jobs demand in the area was substantially Online job postings relative to last year weaker in late February 2021 than at the same (30 days to 24th February) time time last year. Solent LEP UK The gap in jobs demand relative to last year’s levels above regional and UK average. Coast to Capital*
• Close to a fifth (24%) weaker in Enterprise ENTERPRISE M3 South East England M3 than at this time last year. • Over a third weaker in Solent (about 37%). Oxfordshire
In part explained by the relative strength pre- Buckinghamshire TV pandemic. % change
TV Berkshire In part explained by concentrations of consumer- facing sectors that have been affected the most -40.0 -35.0 -30.0 -25.0 -20.0 -15.0 -10.0 by the pandemic. Source: Emsi (2021) SKILLS THAT ARE IN DEMAND AT THE START OF 2021
Jobs demand in Enterprise M3 in January – Top 10 Occupations
Unique Postings Occupation (SOC) % (Jan 2021)
Nurses 3,740 8.2 Programmers and software development professionals 2,877 6.3 Sales accounts and business development managers 2,673 5.9 Care workers and home carers 2,294 5.0 Book-keepers, payroll managers and wages clerks 1,469 3.2 Information technology and telecommunications professionals n.e.c. 1,466 3.2 Finance and investment analysts and advisers 1,408 3.1 Business sales executives 1,255 2.8 Primary and nursery education teaching professionals 1,247 2.7 Business and financial project management professionals 1,073 2.4
Source: Emsi (2021) • Demand for upper-skill occupations in • Demand for intermediate occupations (nursing Enterprise M3 area and care related) SKILLS IN LOW DEMAND
Jobs demand in Enterprise M3 in January – Top 10 Occupations
Unique Postings Occupation (SOC) %) (Jan 2021)
Property, housing and estate managers 511 1.1 Kitchen and catering assistants 502 1.1 Sales and retail assistants 499 1.1 Teaching assistants 470 1.0 Production managers and directors in construction 466 1.0 Residential, day and domiciliary care managers and proprietors 465 1.0 Quantity surveyors 465 1.0 Elementary construction occupations 444 1.0 Records clerks and assistants 441 1.0 Financial and accounting technicians 439 1.0
Source: Emsi (2021) • Low demand for elementary occupations in • Hospitality, retail, education, construction sectors most affected by Covid19 • Technology affecting demand in some occ. (record clerks, some technical occ. etc.)? BUSINESS NEWS HEADLINES
Marlowe has acquired Dundee-based HR software firm Youmanage for £1.2m, as well as Woking-based ESPHR for £3.2m, WPL, the Hampshire based wastewater treatment firm for £10m, and Horsham-based HRSP for £0.7m. Marlowe, 20 Grosvenor Place, London, SW1X 7HN Instem has acquired The Edge, the Guildford-based software firm, for £8.5m. Instem, Diamond Way, Stone, Staffordshire, ST15 0SD Waitrose is to replace its dairy unit on the Leckford Estate in Hampshire with a new beef production facility. Waitrose, Doncastle Road, Bracknell, Berkshire, RG12 8YA
Ocado is looking to open smaller automated online grocery warehouses across the country. Ocado, Titan Court, 3 Bishop Square, Hatfield, AL10 9NE
Flavour Warehousehas acquired Vapouriz, the Guildford-based chain of seven vaping stores. Flavour Warehouse, Lower Eccleshill Road, Darwin, Lancs, BB3 0RW.
Morrison Utility Servicesis to create an unspecified number of jobs to work on a new £50m gas pipe maintenance contract for SGN in southern England. Gunnels Wood Rd, Stevenage, Herts, SG1 2ST. [15-Feb-2021]
Be Wiser is to shed an unspecified number of the 280 jobs at its motor insurance offices in Andover and Swindon. Barrett Hse, Savoy Cl, Andover, Hampshire, SP10 2HZ. [15-Feb-2021]
Vintage Wealth Management has acquired Surrey-based Corfe Wealth Managementfor undisclosed terms. [01-Feb-2021] BUSINESS NEWS HEADLINES
Dentons Pension Management of Surrey has acquired Brown Shipley's pensions administration business, with the transfer of 16 staff. [13-Jan-2021]
Sanderson Solutions Grouphas acquired Surrey-based Highams from Nakama Group for undisclosed terms, taking the workforce at its Bristol-based recruitment business to 250. [06-Jan-2021]
Hermes is to set up a 78,000 sq ft parcel delivery depot at West Park Industrial Estate in Weybridge, Surrey. Capitol House, 1 Capitol Close, Morley, Leeds, LS27 0WH. [21-Dec-2020]
ABL 1Touch, the Surrey-based automotive accident repair group with 13 sites, has undergone a management buy-out backed by Mobeus. [21-Dec-2020]
Stannahhas won planning approval to build a new 90,000 sq ft stairlifts factory in Andover. [17-Dec-2020]
Discover Financial Servicesis to create 100 new software engineering jobs at its digital bank and payments business in Farnborough. PO Box 30943, Salt Lake City, UT 84130 0943, USA. [07-Dec-2020] PRODUCED BY ENTERPRISE M3 LOCAL ENTERPRISE PARTNERSHIPS IN PARTNERSHIP WITH THE ECONOMIC & BUSINESS INTELLIGENCE SERVICE (EBIS)