By Dr Laura Davison, Head of Research at the Economic Development Office, City of London Corporation
London is a thriving city, with recent years having seen strong economic and population growth. Across the next few weeks, we’ll be looking in the blog at some of the data around patterns of growth and drivers of these changes.
This week (20/02/17), I’ve looked at jobs growth, using a combination of the Office of National Statistics (ONS) data on workforce jobs and the Business Register and Employment Survey (BRES), to look at some long term and more recent changes.
The first chart plots London’s workforce jobs from 2006 to 2016 – with the lines showing percentage year-on-year growth (or decline where they drop below zero) for London and the UK. Across this period, London has grown by 967K jobs – a 20% increase, from 4.76 million to 5.73 million. UK jobs increased by 8.3% (2.65 million) to 34.59 million. Both London and the UK saw negative or no growth in the years to September 2009 and 2010, but have consistently grown since – London more rapidly than the UK.
The next chart - drawing on the same data at a sectoral level – gives a snapshot view of the sectors driving London’s growth across this period – looking at the number of workforce jobs in different sectors in 2006, 2011, and 2016.
You can see that in most cases, the increase in employment has been driven by London’s strengths – particularly in the professional and business services areas. The wholesale and retail trade is one exception – having shown small overall growth, but a decline in the period to 2011. Public administration and manufacturing both shrank over this ten-year period.
The next chart looks in more detail at sectoral changes year on year for the more recent data, focusing on 2010 to 2015 – in which stronger growth has been seen. This draws on a different data source – the Business Register and Employment Survey (BRES) which is the official source of employment figures by geography and industry, with the most recent figures being for 2015 (published autumn 2016 – and this data series begins in 2009, so can’t be used to look further back). Note that there are differences in the figures between the two datasets used here, reflecting their different methodologies.
Again, you can see from the total employment (dashed line), the consistent growth in employment across this period – with the dotted line showing particularly strong growth in 2014 and 2015. You also get a better feel from the stacked bars as to the sectors driving growth in each year (or shrinking where they drop below the zero baseline). Employment grew from 4.32 million in 2010 to 5.04 million in 2015 – a rise of 714K, 17%.
You can also see the key role that services have played in shaping London’s growth. The four big business services sectors – information and communication, financial, professional, and business administration – together accounted for 38% of London employment in 2010, and 40% in 2015, having grown by 354K jobs – 21% - across this period.
These business services strengths help to underpin London’s economic success – ranked top in PwC’s latest Cities of Opportunity report (overall and for ‘economic clout’), Kearney’s Global Cities Index (overall and for ‘top global services firms’) and Z/Yen’s latest Global Financial Centres Index.
London’s entertainment offer - also world-leading (ranked top for ‘Cultural experience’ in Kearney’s Index, and for ‘Entertainment and attractions’ by PwC), has also been underpinned by strong employment growth. The combination of retail, accommodation and food, and arts and entertainment services sectors saw 16% growth, with over 150K new jobs – and accounting for 21% of London employment in 2015.
Finally, London’s growing population has been supported by a rise in jobs in health and education – growing by 21% from 2010 to 2015, again more than 150K new jobs – and comprising 18% of London employment in 2015.
Overall, London has seen strong growth across the last ten years, in particular across the last five - strongly driven by its business services economy, and with wider growth across entertainment and hospitality, and health and education.