By Dr Laura Davison, Head of Research, City of London
In my earlier blog post about London’s economy, I talked about London’s economic performance in terms of some of the headline statistics, and finished with the statistic that over the next five years, one in four of the UK’s new jobs are forecast to be created in London.
This time round, I’ll look at some of our research which looks in more detail at employment in London, including where these new jobs might be arising. As a reminder, the full set of accompanying slides are still available at my previous post.
Source the Economic Outlook for London, Oxford Economics for the City of London, April 2013
This first chart is taken from our most recent set of employment forecasts (April 2013), produced by Oxford Economics, and shows predicted changes by sector over the next few years, to 2016. Looking forward in this relatively short term, the expectation is that business and professional services continue to perform very strongly and drive this growth. At the other end of the chart, on-going restrictions in government spending suggest a more negative outlook for public administration, health and education.
The two charts on the following slide look at how this ties in with London’s current sectoral strengths, and patterns of growth over the longer term. So, from the first chart you can see how London’s sectoral make-up compares with the rest of the UK, with the particular concentration of professional services, financial services, and information and communications.
The second table shows that for the ten years from 2002 – 2012, professional services jobs made up a third of new jobs created, and in line with the short-term forecasts are also expected to underpin longer term growth through to 2025. In combination with administrative services, information and communications, and real estate, these four sectors are anticipated to provide 80% of new jobs in London through to 2025. In essence then, London’s jobs growth is building on existing strengths, reflecting existing expertise, links to global markets – both emerging and established, and London’s prominence as a centre for leisure and business visitors.
Source London's Finances and Revenues, City of London, December 2012
Finally, I’ll just give you a snapshot of some more experimental work that Experian carried out for us, looking at how this picture of growth relates to SME businesses. Experian looked at the figures for high growth firms – businesses whose employment has grown by at least 73% (minimum seven new jobs) across a three year consecutive period. They looked both at sectors with particularly high growth over the last three years, and modelled those anticipated to show such high growth in the future.
The next two slides pull out the sectors showing highest proportions of these firms in London - it is worth bearing in mind that this solely looks at proportions of high growth firms, and not, for example, company failures or growth averages. But you can see that, complementing the sectoral employment figures, professional services, financial services and computing feature strongly both recently and looking forward.
In the presentation that these slides come from, I went on to talk more generally about London’s infrastructure and competitiveness, and I’ll post about them soon – but as ever, our published research reports can be found on our website if you’d like to read more before then.
Source Mapping SMEs in the City, City of London, July 2012