Glynn Jones Thursday 10 th June 2010

Change and RenewalRecession & Recovery in Birmingham & SolihullThe Churches’ Industrial Group Birmingham Glynn Jones Thursday 10th June 2010

Presentation • Economic context • The Birmingham and Solihull economy • Economic futures • Key challenges

The nation has experienced a very deep recession, especially affecting construction and manufacturing…. Source: ONS, UK Output, Income & Expenditure, February 2010 Notes: 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%.

Which the West Midlands has been especially vulnerable to Source: PMI West Midlands, Markit Economics / AWM, May 2010 ONS Labour Market Statistics, May 2010

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 products Source: Office of National Statistics

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

Birmingham and Solihull make up a quarter of the regional economy Notes: Birmingham comprises 21% & Solihull 5% of regional GVA

But recent growth has been driven by the public sector, whilst employment in the private sector has shrunk..... Source: Work Foundation Analysis 2009

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

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

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

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

With very high worklessness rates for specific ethnic groups Source: Annual Population Survey, 2009

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

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

Initial recovery may be ‘jobless’ with implications for those groups most impacted by recession..... Source: Labour Force Survey, 2009

There are longer term issues for the low skilled given the continuous ‘shift’ to a knowledge-based economy Source: Labour Force Survey, 2008

Also Birmingham has a very ‘young’ population – creating significant demands for new jobs Source: NOMIS mid-year population estimates 2009

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

This is reflected in the changes in redundancy notifications Source: Jobcentre Plus, Notified Redundancies, February 2010 Note: ‘Other’ includes Agriculture & Fishing and Energy & Water

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

4 key challenges facing Birmingham & Solihull • Achieving a rebalanced economy ? • Creating sufficient jobs for : • those without qualifications • younger people • a rapidly growing workforce • Maintaining the momentum on regeneration & sustainable communities • Assisting communities and individuals to adapt

Glynn Jones Thursday 10 th June 2010