Executive Summary THE A10 / M11 GROWTH AREA ECONOMY. 11 June Hertfordshire A10 M11 Growth Corridor PAGE 1

Transcription

1 Executive Summary THE A10 / M11 GROWTH AREA ECONOMY 11 June 2015 Hertfordshire A10 M11 Growth Corridor PAGE 1

2 EXECUTIVE SUMMARY AN ANALYSIS OF THE A10/M11 GROWTH AREA ECONOMY This report presents a brief analysis of the main economic, social and business characteristics of the A10 / M11 Growth Area in Hertfordshire, and analyses the main challenges and opportunities facing it. The A10 / M11 Growth Area consists of the local authority districts of Broxbourne and East Hertfordshire. Together they comprise an area of 52,700 hectares with a population of 236,100. The Growth Area comprises several medium-sized towns as well as a significant rural area. ECONOMIC OUTPUT AND GROWTH The value of the A10/M11 economy was 4.8 billion in Broxbourne s recent rate of economic growth is high, compared to low growth in East Hertfordshire. In 2012, the value of economic output from the A10 / M11 Growth area was 4.8 billion, representing 18 per cent of Hertfordshire s GVA. At district level, Broxbourne produced 2.0 billion of GVA, while East Hertfordshire produced 2.8 billion. Since the recession, economic output has recovered swiftly in Broxbourne, bouncing back to 2007 levels by Conversely, recovery in economic output has been slower in East Hertfordshire, is not expected to reach pre-recession levels until Contraction in public sector and construction employment and economic output during and after the recession had a significant impact on East Hertfordshire s economy. JOBS AND EMPLOYMENT KEY FACTS: ECONOMY 4.8 billion worth of economic output in 2012 Contributing 18 per cent of Hertfordshire s GVA 108,000 jobs in 2012 Total jobs fell by 3 per cent between 2002 and 2012 (England = +6 per cent) 10-year jobs growth of +5,000 in Broxbourne offset by decline of -8,000 in East Hertfordshire Recent recovery in employee jobs of +3,300 in Broxbourne and +2,500 in East Hertfordshire between 2012 and 2013 The decline in jobs was concentrated in East Hertfordshire (-8,000 or -11 per cent) with job growth occurring in Broxbourne (+5,000 or +13 per cent). More recent evidence suggests a recent recovery in labour demand. In 2013, the number of employee jobs in the area grew by 5,700 with a rise of 2,500 in Broxbourne and 3,300 in East Hertfordshire. FORECAST ECONOMIC GROWTH Economic growth is projected to continue over the next 20 years. Between 2012 and 2022, the Hertfordshire and UK economies are expected to grow by 31 per cent and 29 per cent respectively. Growth is expected to be above average in Broxbourne (35 per cent) but below average in East Hertfordshire (26 per cent). FIGURE 1: TOTAL VALUE OF ECONOMIC OUTPUT ( MILLIONS), ACTUAL AND FORECAST 2002 TO 2031 The A10/M11 Growth Area is a significant source of jobs, with recent recovery in jobs growth evident. In 2012, there were 108,000 jobs in the A10/M11 Growth Area, representing 18 per cent of all jobs in Hertfordshire. Between 2002 and 2012, jobs in the A10/M11 Growth Area fell by 3,000, or 3 per cent, compared to growth of 5 per cent and 6 per cent across Hertfordshire and England. Source: East of England Forecasting Model, Autumn 2014 baseline forecasts. Hertfordshire A10 M11 Growth Corridor PAGE 2

3 HIGH RATES OF ENTREPRENEURSHIP The A10/M11 Growth Area has high rates of entrepreneurship, with strong growth in the business population, and has a particularly strong share of microbusinesses compared to the national average. In 2013, there were 11,735 active enterprises in the A10/M11 Growth Area. These represented 20.2 per cent of all businesses in Hertfordshire. Two-thirds of these businesses were located in East Hertfordshire (7,480). The number of businesses per 1,000 working age people is very high in the A10/M11 Growth Area, particularly in East Hertfordshire. In 2013, there were 79 businesses per 1,000 people living in the A10/M11 Growth Area this was similar to the Hertfordshire average (80) and much higher than across England (62). The enterprise base in the area has grown more strongly than average over the past nine years. Between 2004 and 2013, the number of enterprises grew by 16.2 per cent. This was weaker than growth across Hertfordshire (20.8 per cent) but stronger than the England average (13.6 per cent). Growth was stronger in Broxbourne (18.7 per cent) than East Hertfordshire (15.0 per cent). A HIGH SHARE OF BUSINESSES EMPLOY LESS THAN FIVE EMPLOYEES In 2013, almost four out of five businesses (78.8 per cent) were micro businesses, employing 0-4 people. This was similar to the Hertfordshire average and higher than the England average (75.8 per cent). In 2013, 14 new businesses started per 100 active enterprises in the Growth Area. This was the same as the Hertfordshire and England averages. KEY FACTS: ENTERPRISE 11,735 active enterprises in the A10/M11 Growth Area in per cent of Hertfordshire s active enterprises 79 businesses per 1,000 people (England = 62) Four out of five (78.8 per cent) businesses are microbusinesses (employing less than 5 people) (England = 75.8 per cent) 14 new business starts per 100 active enterprises in 2013 (England = 14). FIGURE 2: BUSINESS START UP RATES 2004 TO Source: Business Demography, Office for National Statistics. FIGURE 3: BUSINESS ON-YEAR SURVIVAL RATES 2008 TO England East Hertfordshire Broxbourne England East Hertfordshire Broxbourne Source: Business Demography, Office for National Statistics. THE CHANGING INDUSTRIAL STRUCTURE The industrial structure of the A10/M11 Growth Area has changed over the past 20 years, with knowledge-based activities such as Professional, Scientific & Technical industries becoming more significant. Although total employment has declined in Public Administration and Retail Industries they remain large employers. Tourismrelated employment is lower than average. Over the past 20 years, Public Administration, Construction and Pharmaceuticals Manufacturing have become less significant contributors to the East Hertfordshire economy. In Broxbourne, Education and Finance became less significant contributors to the economy between 1992 and During the same period, Real Estate and Professional Services became more important contributors to the Broxbourne economy, increasing their shares of total GVA by 7 and 6 percentage points. In terms of employment, the largest industries are Business Administration & Support Services (14,800 employees); Professional, Scientific & Technical Activities (13,500 employees); and Retail (13,000 employees). Hertfordshire A10 M11 Growth Corridor PAGE 3

4 GROWTH INDUSTRIES Employment grew at the highest rate in Professional, Scientific & Technical Activities (+6,200, +84 per cent); Business Administration & Support Services (+2,500, +21 per cent); and Health (+1,100, +17 per cent).over the same period (2009 to 2013), employment declined significantly in Construction (-2,100, -24 per cent); Retail (-1,900, -12 per cent); and Transport & Storage (-1,200, - 34 per cent). Major industrial specialisms include Business Administration and Support Services, which are 1.7 times more important for employment than nationally; and Professional, Scientific and Technical Activities which are 1.6 times more important, particularly in the activities of Head Offices. Tourism-related employment is less significant in the A10/M11 growth area. The Accommodation and Food Service industry accounted for 5,200 employees in 2013, or 5.3 per cent of total employment in the A10/M11 Growth Area lower than the County (5.5 per cent) and national (6.9 per cent) averages. KEY FIRMS The A10/M11 Growth Area has a number of significant headquarters and major subsidiaries and branches. The presence of foreign-owned businesses is notably low. Broxbourne is the location for the headquarters and branches of several major firms including Tesco, Sainsbury s plc, Marks & Spencer, Merck Sharp & Dohme and VolkerWessels UK and its subsidiary VolkerFitzpatrick. Recently it was announced that Tesco plans to be relocate its headquarters from Cheshunt in Broxbourne to Welwyn Garden City in Welwyn-Hatfield. Park Plaza is home to the world's largest printing plant, which produces publications for News International including The Sun, The Times and formerly the News of the World. East Hertfordshire is the location for the headquarters and branches of several major firms including GlaxoSmithKline, McMullen & Sons, Royal Sun Alliance, Which Ltd and Stephen Austin & Sons Ltd. KEY FACTS: INDUSTRIES In 2013, the largest industries in terms of employment were Business Administration & Support Services (14,800 employees, or 14.4 per cent of all employees) (England = 8.4 per cent) Professional, Scientific & Technical Activities (13,500 employees, 13.1 per cent) (England = 8.3 per cent) Retail (13,000 employees, 12.7 per cent) (England = 10.0 per cent) Between 2009 and 2013, employment increased significantly in the following sectors: Professional, Scientific & Technical Activities (+6,200, +84 per cent) (England = per cent) Business Administration & Support Services (+2,500, +21 per cent) (England = per cent) Health (+1,100, +17 per cent) (England = +7.8 per cent) The A10/M11 Growth Area has significant industrial specialisms in: Business Administration & Support Services: 1.7 times more important than nationally for employment Professional, Scientific & Technical Activities: 1.6 times more important PEOPLE AND SKILLS There is a growing population and a growing workforce with higher rates of economic participation and very low rates of unemployment. The local economy supports highly-skilled jobs. Skills attainments vary markedly between Broxbourne (significantly lower than the national average) and East Hertfordshire (significantly higher). The A10/M11 Growth Area has experienced a high rate of population growth (8.3 per cent over the past 10 years), and this is expected to continue (projected 9.6 per cent growth 2013 to 2023). The Growth Area has high rates of economic participation and low rates of unemployment. Overall qualification rates for the Growth Area are similar to the national average, with 30 per cent of working age residents holding their highest qualification at degree level or above. Hertfordshire A10 M11 Growth Corridor PAGE 4

5 England Hertfordshire East Hertfordshire Broxbourne A10 M11 Growth Area Skills attainment varies markedly between the two districts with high qualification rates in East Hertfordshire and lower-than-average qualification rates in Broxbourne: East Hertfordshire ranked within the top 20 per cent of all English local authority districts with regards the percentage of people qualified to at least Level 2 and Level 4 while Broxbourne ranked in the bottom 20 per cent. Broxbourne also had the lowest qualification rates in Hertfordshire. FIGURE 4: SHARE OF WORKING AGE RESIDENTS BY HIGHEST QUALIFICATION ATTAINED, Source: 2011 Census, Office for National Statistics. SKILL LEVELS OF JOBS Level 4+ Level 2+ No qualifications In 2011, 53.7 per cent of people working in the A10/M11 Growth Area were employed in the most highly-skilled Level 3 and Level 4 professions (managers & senior officials, professional occupations, associate professional & technical professions, and skilled trades) slightly higher than the national average (52.5 per cent). The A10/M11 Growth Area is a net exporter of skills to London and surrounding local economies. The Growth Area loses a proportion of its managers, senior officials and professionals to out-commuting, and there has been a fall in the number of people working as managers and senior officials in the Growth Area over the past decade. East Hertfordshire loses its most highly skilled resident workforce through out-commuting. East Hertfordshire s resident population (who live in the district, but do not all work there) has slightly higher qualification rates than the working population (who work in the district but do not necessarily live there), suggesting that the Growth Area loses its most highly qualified people through outcommuting. Conversely, Broxbourne is a net importer of skills, with a higher percentage of people working in the area who are qualified to Level 4+ than compared to employed residents (who may not necessarily all work in the area). The average earnings in 2014 for full time jobs in the growth area were in Broxbourne and in East Hertfordshire, compared to the average of for England. Average workplace earnings in Broxbourne have consistently increased since 2004 to the extent that they now exceed East Hertfordshire s average workplace earnings. In East Hertfordshire, residents earnings exceed workplace-based earnings, reinforcing the view that the district is a net exporter of skills. Wage differentials between different areas may influence commuting patterns and differences in workplace-based and resident skills. KEY FACTS: PEOPLE AND SKILLS Population of 236,100 in 2013 Population grew by 8.3 per cent, or +18,000 over 10 years from 2003 to 2013 (England = 7.9 per cent) Projected 9.6 per cent increase in population to 258,200 between 2013 and per cent of working age people were economically active in 2014 (England = 77.7 per cent) 81.1 per cent of working age people were in employment in 2014 (England = 72.5 per cent) A claimant count of 1.1 per cent (the share of working-age adults claiming unemployment related welfare benefits) (England = 1.9 per cent) 30 per cent of working-age residents qualified to at least degree-level (England = 30 per cent) In 2011, 53.7 per cent of people worked in the most highly-skilled Level 3 and Level 4 professions (England = 52.5 per cent) Average earnings in 2014 for full time jobs in the growth area were in Broxbourne and in East Hertfordshire (England = 13.28) Hertfordshire A10 M11 Growth Corridor PAGE 5

6 ANALYSIS THE MAIN STRENGTHS OF THE A10/M11 GROWTH AREA S ECONOMY ARE: Strong rates of economic growth Strong population and workforce growth High rates of entrepreneurship Significant presence and growth in knowledgebased industries High rates of economic participation and very low rates of unemployment On average across the growth area, high qualifications rates and highly-skilled jobs Transport links THE MAIN CHALLENGES INCLUDE: The marked difference between economic growth and jobs growth rates in Broxbourne (higher rates of growth) and East Hertfordshire (lower rates of growth) The differing qualifications and skills profile of Broxbourne (much lower than average) and East Hertfordshire (higher than average) The relative lack of large urban settlements, and large corporates, including foreign-owned firms The high level of out-commuting of highlyqualified, highly-skilled residents The strongly rural character of the economy outside of the main market towns and settlements THE A10/M11 GROWTH AREA AS A FUNCTIONAL ECONOMY The A10/M11 Growth Area forms a fairly coherent travel to work area on its own, and also has significant incommuting from workers resident in Uttlesford and Epping Forest, as shown in Figure 5 below. FIGURE 5: COMMUTING FLOWS INTO THE A10/M11 GROWTH AREA Hertfordshire A10 M11 Growth Corridor PAGE 6