Appendix 4 Cardiff Economy Today Draft 2 CARDIFF ECONOMY The Cardiff Economy CARDIFF ECONOMY 3 The city’s economy continues to perform well. Jobs are being created, and the city’s GVA is rising faster than any other UK Capital. We have seen new sectors emerge in the city, from fin-tech to creative and cultural enterprises that are truly competitive on a global level. Our universities continue to provide a pipeline of talent, whilst school and further education performance has improved considerably. Furthermore, the city’s NEET population – those not in employment education or training – has fallen dramatically. We know, however, that challenges remain. Despite job growth we have seen unemployment creep up in recent years. We continue to see stark differences in the economic outcomes of our different communities, and the city’s southern arc stubbornly remains an area in need of support. Brexit also remains a threat, not just in terms of trade and the job market, but also in terms of support for the city-region for regeneration. Our opportunities, however, are considerable and real, and we should not underestimate what Cardiff can contribute to the Wales and UK economy. Our city is home to household names in the financial services sector, homegrown and Cardiff developed enterprises. Online TV providers are commissioning Cardiff companies to produce their latest boxset shows. The workings of most of the world’s mobile phones will include technology developed and made in Cardiff. As a place to live, work and visit Cardiff continues to punch above its weight. We have well over 20 million people a year now visiting our city, spending more than £1.3bn. We continue to rank highly in quality of life tables, and the likes of the Champions League has meant that the city continues to attract more and more world-class events. Cardiff Economy Summary – SWOT Strengths Weaknesses • Capital City Status – driver of the Welsh • Relatively low levels of productivity – which in economy turn affects earnings • Fast growing and dynamic economy - proven • Low numbers of HQ operations – impacting on ability to create jobs in competitive sectors innovation and competitiveness • Well qualified workforce – 2/5ths qualified to • Pressure on the city’s transport infrastructure – degree or equivalent which is only due to grow • Number 1 in the UK for quality of life • Lags some UK competitors in visitor numbers – capacity to improve • World class university research – Cardiff University ranked 6th in the UK • Large wage disparities – need to support productivity improvement for everyone • Greater city-region alignment and established governance • Poor international connectivity – physical and digital • Sporting and cultural assets – including Europe’s biggest covered arena • Lack of urban policy agenda in Wales – reduces impact of agglomeration’ • Advanced digital infrastructure Opportunities Threats • Scope for growth in key sectors including • Competition from other UK cities for mobile financial and business services and the creative investment sector • Competition from other UK cities for mobile • Improving business infrastructure such as the workforce – businesses are reliant on maintain a world class BBC Drama Studios in Cardiff Bay skilled workforce • Growing economy brings opportunities for • Pressures of population growth will impact on wider markets infrastructure • Investment in Metro will unite the city-region • Need to maintain and promote the ‘Cardiff and provide more opportunities ’ brand in an increasingly competitive marketplace • Growing visitor economy – growing faster than any other UK city • Impact of Brexit on ability to attract and retain skilled workers • Potential to exploit benefits from Brexit such as removal of Structural Funds boundaries • Need to keep pace with technological advances 4 CARDIFF ECONOMY Employment A variety of different data sources can be used to highlight the city’s employment growth. The most recent, based on the Annual Population Survey suggests that well over 230,000 people are working in the city. Workplace Employment Apr 2014-Mar 2015 206,900 Apr 2015-Mar 2016 222,000 Apr 2016-Mar 2017 231,500 Apr 2017-Mar 2018 236,800 Source: annual population survey - workplace analysis Almost half (47.9%) of those in employment in the city are in one of Welsh Government’s priority sectors. Financial and Professional Services (19.0% of total employment) is by far the largest of these in Cardiff with it accounting for almost a third of the sector’s total employment in Wales. Creative Industries (7.1%) are also more prevalent in the city, with Cardiff again responsible for around a third of Wales’s total employment in the sector. Employment by Welsh Government Priority Sector, 2016 Employment (thousands) Priority Sector CARDIFF Wales No. % No. % Advanced materials / manufacturing 5.6 2.5 83.9 6.2 Construction 13.9 6.1 110.5 8.2 Creative industries 16.1 7.1 48.6 3.6 Energy & environment 25.3 11.2 155.8 11.6 Food & Farming 1.6 0.7 50.6 3.8 Financial & professional services 43.1 19.0 136.8 10.2 ICT 5.6 2.5 26.6 2.0 Life sciences 3.4 1.5 17.2 1.3 Tourism 21.3 9.4 131.2 9.8 In A Priority Sector 108.6 47.9 604.1 45.0 Not In A Sector 118.3 52.1 738.6 55.0 Total 226.9 100.0 1,342.6 100.0 Source: Welsh Government NB. Local units are individual sites of an enterprise. The priority sector totals will not equal the sum of the individual priority sectors as there is overlap between several sectors. CARDIFF ECONOMY 5 Today over two-thirds (69.9%) of Cardiff’s population aged 16-64 are in employment; the fifth highest rate amongst the core cities and Edinburgh. National comparisons tend to be difficult – simply because of the city’s large student population. This also impacts on the city’s economic activity rate. Employment and Employment Rate (Aged 16 to 64), Jan – Dec 2017 Employment Rate Economic Activity Area (%) Rate (%) Bristol, City of 78.2 81.8 Leeds 76.6 80.1 Edinburgh, City of 75.7 77.6 Sheffield 70.7 75.6 CARDIFF 69.9 74.9 Manchester 67.5 72.0 Liverpool 67.1 71.3 Newcastle upon Tyne 66.6 71.1 Glasgow City 66.0 70.0 Birmingham 63.6 69.4 Nottingham 57.4 62.4 Wales 72.4 76.0 United Kingdom 74.7 78.2 Source: Annual Population Survey, ONS Cardiff’s unemployment rate for those aged 16+ (6.1%) is one of the highest across the core city network. Although it experienced a sizeable decrease between 2012 and 2016, Cardiff has also consistently exceeded the figures of both the Wales and Great Britain since 2004, and saw its rate increase over the past year. Much of this rise has been driven by a substantial increase in the economically active population over recent years, where more people are entering the labour market and looking for work. Unemployment rate - aged 16-64, Jan – Dec 2017 Area Unemployment Rate (Aged 16+) Nottingham 8.3 Birmingham 8.1 Newcastle upon Tyne 6.9 CARDIFF 6.1 Sheffield 6.0 Liverpool 5.9 Manchester 5.6 Glasgow City 5.6 Leeds 4.7 Bristol, City of 4.0 Edinburgh, City of 3.2 Wales 4.8 Great Britain 4.4 Source: Annual Population Survey, ONS NB. Local authority rates are model-based 6 CARDIFF ECONOMY Economic Output In 2016, Cardiff (£9,933m) accounted for 17% of the total gross value added (GVA) for Wales, with its GVA growing at a faster rate (5.7%) than both Wales and the UK over the year. In terms of GVA per head, Cardiff (£27,480) is only a mid-table performer across the major cities, with the figure for Edinburgh over 40% higher at £39,321, although its rate of growth over the year again compared favourably with the other areas. Gross Value Added (Balanced) (£million), 2016 Annual % Area 2016 Change Birmingham £25,720 4.3 Leeds £21,951 2.2 Glasgow City £20,371 3.5 City of Edinburgh £19,942 4.6 Manchester £18,172 5.4 Bristol, City of £14,313 4.7 Sheffield £11,433 1.4 Liverpool £11,334 0.6 CARDIFF £9,933 5.7 Nottingham £8,911 4.4 Newcastle upon Tyne £7,802 2.1 Wales £59,585 4.0 United Kingdom £1,747,647 3.7 Source: ONS (2016 figures are provisional) Gross Value Added (Balanced) Per Head of Population (£), 2016 Annual % Area 2016 Change City of Edinburgh £39,321 2.9 Manchester £33,573 3.2 Glasgow City £33,120 2.0 Bristol, City of £31,513 3.6 Leeds £28,079 1.2 CARDIFF £27,480 4.5 Nottingham £27,393 2.3 Newcastle upon Tyne £26,317 0.8 Liverpool £23,389 -0.6 Birmingham £22,871 3.0 Sheffield £19,870 0.4 Wales £19,140 3.5 United Kingdom £26,621 2.9 Source: ONS (2016 figures are provisional) CARDIFF ECONOMY 7 In terms of trends, Cardiff’s GVA per head has consistently exceeded the UK average since 1998. Although the gap gradually declined following a 2007-peak, in recent years it has again diverged away from the national figure. In 2016, the GVA per hour worked was £28.8 for Cardiff and Vale of Glamorgan. This was only 88.5% of the UK figure and made it a mid- level performer across the major UK NUTS3 areas. GVA per filled job (£45,157) for 2016 compared even less favourably with it only exceeding the Nottingham, Sheffield, and Tyneside regions, and was just 85.8% of the UK figure. Enterprise In 2016, there were 1,780 new enterprises in Cardiff, equating to 49.3 births per 10,000 residents.