State of the Tyne & Wear Labour Market Report Winter 2009/10
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State of the Tyne & Wear Labour Market Report Winter 2009/10 This edition covers developments mainly in the period Oct—Dec 2009. Ref:LMR 10/1 March 2010 CONTENTS Summary and Key Points …………………… 1 §1:Employment Expectations ....……….…… 2 §2 Job Change Announcements .……..…….. 3 §3: Claimant Unemployment ………………. 4 Unemployment Forecasts, Vacancies, Change by Industry …………………………... 7 Tables of itemised Job Gains and Losses ….. 9 TWRI 1st Floor Provincial House Northumberland Street Newcastle upon Tyne NE1 7DQ Tel: (0191) 277 1912 Fax: (0191) 277 1911 E-MAIL: [email protected] WEBSITE: www.twri.org.uk State of the Tyne & Wear Labour Market Report Winter 2009/10 SUMMARY and KEY POINTS are consistent with a further rise in Tyne & Wear of Labour Market Overview about 2,000 over the year to Q4 – which would take it to about 40,000. This is similar to the January total. In the 3 months to December 2009 all three of Tyne & Wear’s labour market indicators improved; surveys, press reports of jobs and, remarkably, claimant unemployment fell (partly seasonally) by Unemployment a few hundred. Caution: the fall in claimant unemployment to December was small and Over the 9 months to January, claimant temporary; it was reversed in January by a rise of unemployment rose in all Districts (by hundreds) about 2,400 or about 700 more than ‘normal’ except in Sunderland (down over 400). The rises seasonal rise1. were fastest in Newcastle and North Tyneside, perhaps indicating some modest spread of losses to 1 TW firms reported in the Q4 survey2 much the services sector. Sunderland has been smaller workforce reductions in services rebounding from its earlier steeper fall into recession. and, remarkably, in manufacturing,3 a small It and South Tyneside might also have benefited from growth. any modest rise in construction employment. 2 Job Change announcements by firms in In the UK seasonally adjusted claimant TW were quite strongly positive (gains unemployment has risen only 2,000 over the 3 exceeded losses by about 1,200 as in Q3). months to January; it fell in Nov and Dec., but rose These two consecutive quarters of strong in January. The changes were -6,300 in Nov., - growth appear to mark a break with the 15,200 in Dec and +23,500 in January. This pattern mostly weak or shrinking employment of the 5 is to be expected given the VAT rise in January previous quarters from spring 2008. This (bringing forward some activity). The prolonged snow press-based series is thus consistent with a in January may also have temporarily hit some resumption of modest employment growth. employment, especially in construction. [Caution: this source omits many job losses and timings of the gains coming into effect are variable. See §2 for Also, official UK unemployment (using the LFS more details.] definition, which is wider than the claimant count) is 3 Claimant unemployment in TW fell over estimated to have fallen in the 3 months to Dec the 3 months from Sept-Dec (by nearly 300); compared with the previous 3 months4 by 3,000. this is a better performance than the UK, The main change in the UK labour market where the rise has been very modest. (numerically) is not in unemployment or employment; Nevertheless, in Jan. TW was 18% higher rather economic inactivity has risen. In particular, than 12 months before - a rise of around students may have given up looking for jobs (whilst 6,200 to almost 40,000 – to a rate of 8.0%. they are studying). • Over the year to January, claimant unemployment rates in TW have risen by Local Job Gains about 1.3 percentage points; they have risen by over 3.3 percentage points in two Large gains in Q4 included 1,000 at Tesco (its Gateshead wards and one Sunderland ward Financial Services) in North Tyneside, 350 re-hirings (map shows this). at Nissan in Sunderland and 250 at The Listening Company in Newcastle (a call centre). • Notified vacancies to JobCentre Plus in Q4 were down about another 15% from a year Additionally, 100 jobs at Sage (in customer support, before. They are down by about a third from 2 for the software firm) in Newcastle. years ago. Vacancies were down by about 40% from 2 years ago in Sunderland and in North Tyneside. Local Job Losses Caution: normally, the fall in employment The biggest loss was at North Tyneside council (300 associated with a recession can be expected to job cuts). Others over 100 were Twinings 263, continue for some quarters after output begins to National Grid 189 (both in North Tyneside), plus rise again. This boost productivity and profitability. BAE 167 and NE Bakery 120 (both in Newcastle). Consensus forecasts for the UK claimant count Date: 16th March 2010. 1 Based on 2005 and 2006. 2 Business Survey NE (TW results only used here). 3 Business Survey North East’s TW results (for the Chamber 4 of Commerce). Than the claimant count. TWRI 1 State of the Tyne & Wear Labour Market Report Winter 2009/10 §1: Employment Expectations In Q4 2009, Tyne & Wear service firms’ employment continued to fall (blue line below zero), but this halved from Q3 (to about 5pp) like for British service firms (yellow). Service firms’ employment change has been negative in the last 5 quarters (Britain, yellow line) and 6 quarters (TW, blue line). Caution: TW’s high level of expected employment change, at about +20pp as in Q3 (red) may not mean much growth: historically, TW service firms have usually been over-optimistic by around 15-20pp, whereas British service firms have been so by around 10pp. Service Workforce Britain and TW 60 40 20 Balance 0 -20 -40 06 07 08 09 Actual TW Expected TW Actual Br Expected Br Source: Business Survey NE (TW data) – from Economic Research Services; national data from British Chamber of Commerce. Caution: these measures weight all firms equally, and make no allowance for the different scale of job changes in different firms and industries. For the first time since early 2008, Tyne & Wear manufacturing firms’ reported employment change in Q3 was positive (blue line), as was British firms’ (yellow line). This follows a weak Q3 for Tyne & Wear manufacturing firms. Manufacturing Workforce Britain and TW 60 40 20 0 Balance -20 -40 -60 06 07 08 09 Actual TW Expected TW Actual Br Expected Br Caution: the expectations of manufacturing firms (for the next 3 months) proved to have a poor forecasting ability over the four years. In Q3 this was extreme; the record gloomy manufacturing employment prospects (about -50pp) among TW’s firms (red line) was followed by employment growth! They have been replaced by mildly positive prospects, slightly above Britain’s (green line). 2 TWRI State of the Tyne & Wear Labour Market Report Winter 2009/10 §2: Job Change Announcements Job Changes in the Q45 period (as reported in the press), on a net basis, were quite strongly positive as in Q36 (both around +1,200). This appears to be a clear break with the previous five quarters which were mostly weak, as in Q2 (around +450), or negative. Extremely tentatively, this press evidence from the second half of 2009 is broadly consistent with the TW private sector economy expanding employment by about 2-3,000pa (or about 0.4- 0.6%pa), subject to time ‘lags’ (delays) with the gains. This is a rough central estimate, with a wide range of uncertainty (possibly of thousands, due to unknown omissions. Note, below, gives explanation). Job Change Job gains minus job losses, from the press 5000 3000 1000 -1000 -3000 -5000 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 01 02 03 04 05 '06 '07 '08 '09 Quarter Net Job Change Source: The press as logged by TWRI A full itemised list of reported job gains and losses is given at the end of this report (in size order). Note on interpretation of press reports of Job Change (JC), aggregated by TWRI: This source gives good coverage of market services and manufacturing – together about half the economy. It therefore has important gaps (‘omissions’), the three main ones being; public service employment growth was never reported in any significant way (1997-2007), job losses from small retailers are never captured effectively and construction (as with other sources) cannot be recorded at all. A fourth gap was created through temporary jobs being reported but their demise not being. TWRI analysis of the long-term series (14 years) has found the JC series typically omitted about 2,000pa job losses (but this is variable). This might be partly explained by the time lags from announced gains to their fruition. 5 Oct-Dec 6 Jul -Sept 2009. TWRI 3 State of the Tyne & Wear Labour Market Report Winter 2009/10 §3: Claimant Unemployment In Tyne & Wear, claimant unemployment was broadly flat from March to December (graph, below). ‘Normal’ seasonal patterns would have reduced unemployment over these 9 months (roughly as in 2005, below). Thus seasonally adjusted claimant unemployment rose slightly (perhaps between 500-1,000). The chart (below) shows comparison with previous ‘normal’ years such as 2005; that year, claimant unemployment fell by about 1,500 from March-December. Claimants in Tyne & Wear 2005, 2007, 2009 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 January February March April May June July August September October November December 2005 2007 2009 In 2009, from spring-December, claimant unemployment fell in South Tyneside and, particularly, in Sunderland. Indeed, by January 2010, Sunderland was the only District with lower unemployment than in April (9 months earlier), down over 400 (shown in table, below).