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Executive Summary

National Economic Context: 

  • The UK economy grew by 0.7% in Q2 2013.
  • Unemployment has remained relatively stable throughout 2012 and has begun to decrease in to 2013.

 

Economic Linkages:

  • Over 75% of people who live in Worcestershire also work in the county.
  • As 25% of residents work outside of the county, the prosperity of the Worcestershire population is in part affected by economic conditions outside the county, in particular in Birmingham and the wider West Midlands conurbation. However, as a result of in-commuting the prosperity of other areas is also affected by economic success in Worcestershire.
  • It is desirable to reduce levels of commuting in order to develop more sustainable travel patterns, however, as most commuters do so for higher paid jobs, this would require a marked change in the local economy.
  • Worcestershire has national and international links, through parent companies, supply chains, and because of the markets they serve.

 

Demographic Information:

  • The population of Worcestershire has grown almost 11% since 1991, and is forecast to increase by a further 5% by 2021.
  • Worcestershire’s population is aging; the proportion of the population aged over 65 is now over 19%, and the number of people aged 65-plus is forecast to grow by almost 30% over the next 10 years, increasing demand for services used by these groups. This has implications for the proportion of the population that is of working age and the size of the available workforce.
  • Although Worcestershire’s population is increasing due to migration, the county loses approximately 1,400 15-19 year olds per annum due to internal moves.
  • Although largely rural by area, over 70% of the population of Worcestershire live in urban areas.
  • The composition of households is forecast to change, with a 10% increase in single person households by 2021.

 

Income and Earnings:

  • Median household income in Worcestershire in 2012 was £29,570.
  • Earnings of Worcestershire residents are around 10% higher than those of the county’s workforce.
  • Total household income in Worcestershire is £8,94bn, 47% of which is shared amongst Wealthy Achievers of the county who make up 37% of households.

 

Productivity:

  • Total Gross Value Added (GVA) in Worcestershire in 2011 was £9.159 million, which equates to 9.6% of the West Midlands total.
  • Total GVA in Worcestershire is historically lower than its neighbours, such as Warwickshire and Staffordshire where the total GVA is £11,253 million and £12,501 million respectively.
  • GVA per resident head in Worcestershire in 2011 was £16,368 compared with £17,486 in the West Midlands and £21,349 in England.
  • GVA per head in Worcestershire is historically lower than its neighbours, such as Warwickshire and Gloucestershire where the GVA per head is £20,955 and £20,218 per head respectively.

 

Business Demography:

  • Business births increased to 2,325 in 2011, a rise of 6.9% on the previous year.
  • Business deaths fell to 2,170 in 2011, a fall of 13.5% on the 2010 figure.
  • Entrepreneurship is high in Worcestershire; 44 businesses are started per 10,000 adults.  However this has fallen from 53 business starts per 10,000 adults in 2008.
  • Almost one-quarter of the workforce are employed in businesses with more than 200 employees, which represent 0.5% of all businesses.
  • Most Worcestershire businesses establish and grow locally, rather than being the result of large scale inward investment.

 

Business Survival:

  • The proportion of businesses surviving their first year is 93%.
  • Five-year survival rates are 47%.

 

Economic Activity and Employment Rates:

  • Economic activity and employment rates are higher in Worcestershire than across the region or nationally at 80% and 76% of the population aged 16-64 respectively.

 

Employment Status:

  • 11% of employees in Worcestershire are self-employed.
  • 28% of employees work part-time, this is much higher amongst women (46%) than men.
  • Although little evidence is available, it is thought that underemployment exists in the economy.

 

Employment by Industry:

  • Almost 28% of the workforce is employed in public sector dominated activities Public administration & defence; Education; and Human health & social work. A further 16% is employed in Production and 12% in Retail.
  • Around 40% of the female workforce is employed in public sector activities, compared to just 12% of males. This may have implications for unemployment as public sector spending reduces.
  • Over time, the employment structure in Worcestershire has changed, with the proportion of the workforce employed in production falling 1.2 percentage points from 2008-2010. Proportions have increased in other sectors including the Health industry where the proportion rose 2.3 percentage points.

 

Worklessness:

  • The number of people on the claimant count is 11,600 representing 3.0% of the 16-64 population. This is lower than the region or England.
  • Unemployment levels have stabilised, but remain considerably higher than pre-recession levels.
  • To date, male dominated industries have been worst affected, with the male unemployment rate increasing more than the female rate. However, with over 40% of the female workforce employed in public sector activities, the female rate is likely to increase in future as public sector spending falls.
  • 3,045 18-24 year olds were unemployed in May 2012, representing 7.4% of the population in those ages.
  • Incapacity/Employment Support Allowance claimant numbers are fairly stable at around 18,000.
  • In total 9.7% of the working age population in Worcestershire are claiming out of work benefits.
  • In Worcestershire, two areas have more than one-third of residents claiming out of work benefits, these are: Oldington and Foley Park; and Warndon.
  • Worklessness costs the local economy in terms of benefit payments and lost productivity.

 

Deprivation:

  • In Worcestershire 3.6% of people live in households with a median income less than £17,678 per annum (60% of the English median).
  • Parts of Worcester City, Redditch, Kidderminster and Malvern are ranked amongst the most deprived 20% in England.
  • Deprivation in rural areas tends to be more dispersed than in urban areas and is harder to measure.

 

Skills and Education:

  • Across the county 19% of employers report having skills gaps.
  • There was a 31% increase in the number of 16-18 year olds starting an apprenticeship programme in 2010/11 compared to the previous year
  • In 2010 82% of young people obtained a level 2 qualification by age 19 and 57% obtained level 3.
  • Qualification levels in the county are generally good, with 29% having Level 4+ qualifications. However, still 13% have no qualifications.
  • 5.5% of 16-18 year olds are Not in Employment, Education or Training.
  • Since 2000/1 the proportion of young people progressing to Higher Education has increased by 8 percentage points to 40%.
  • The University of Worcester, and colleges throughout the county, have links with businesses and provide an opportunity for greater academic-business cooperation, tailoring courses to meet local skills needs and offering business training.

 

Planning and Infrastructure:

  • The Coalition Government is committed to the abolition of “top down” planning and returning more planning powers to local authorities. Regional Spatial Strategies (RSS) – which previously constituted part of the development plan – have therefore been revoked in the Localism Bill.
  • Local authorities are now being encouraged to proceed with their Core Strategy preparation setting their own development targets at the local level.
  • Net housing completions in Worcestershire peaked at 2,144 in 2004/5. Since then they have more than halved to 939 in 2010/11. The fall has been most marked since 2006/7 as a result of the credit crunch and subsequent recession which has severely impacted house building.
  • A number of infrastructure improvements are needed to support economic growth in the county. The vision of the Worcestershire LBP is to "deliver faster broadband for all by 2015" including 90% of businesses in Worcestershire to have the ability to access Superfast Broadband by 2015

 

Environmental Sustainability:

  • Worcestershire’s natural and cultural environment is a major asset to the county, attracting tourists, businesses, entrepreneurs and employees to the county.
  • Environmental challenges, such as climate change, provide opportunities for Worcestershire businesses to develop new technologies required for a low carbon economy.
  • The adoption of sustainable working practices will provide businesses with a competitive advantage over others as customers increasingly expect companies to act in an environmentally responsible way. Such practices can also reduce operational costs.
  • National financial incentives for developing renewables, such as the Renewables Obligation, Feed in Tariff, and Renewable Heat Incentive are making investment in new technologies increasingly attractive, especially for those well-placed for long-term investments.
  • As well as opportunities, the environment also poses a threat to Worcestershire’s businesses, for example, the flood event seen in July 2007.

 

Forecasts:

  • The OBR forecast that Gross Domestic Product (GDP) will grow by 0.8% in 2012 and 2.0% in 2013, rising to 3.0% by 2015.
  • They OBR forecast that Public Sector Net Borrowing (PSNB) will fall from 8.3% of GDP in 2011/12 to 2.8% in 2015/16, and that Public Sector Net Debt will increase from 67.3% of GDP in 2011/12 to 76.0% in 2015/16.
  • The budget deficit (cyclically-adjusted) is currently 4.6% of GDP in 2011/12. It is intended that this will be eliminated by 2016 and reach a surplus of 0.5% in 2016/17.
  • Consumer Prices Index measure of inflation is forecast to remain around 3% in 2012, declining to around 2% in 2013.
  • The unemployment rate is expected to peak in 2012 at 8.7%, before falling back to 6.3% by 2016. Employment is forecast to rise to 30 million by 2016.
  • The Office for Budget responsibility is currently forecasting 610,000 public sector jobs will be lost by 2015/16; other commentators, such as the Chartered Institute of Personnel and Development think this is an underestimate, forecasting the loss of 725,000 public sector jobs, and 900,000 private sectors jobs.

 

 

Key Statistics

A summary of the latest up to date key economic indicators can be found on the Office for National Statistics website.
 
Below is a table of key local statistics, with a comparison to the regional and national figure.
 
  Period Worcestershire West Midlands England

Population

Mid-year Estimate

2010

557,400

5,455,200

52,234,000

Area (Hectares)

2009

173,529

1,300,400

13,303,733

Population Density (Population per Hectare)

2010

3.2

4.2

3.9

NINo Registrations

2010/11

2,780

47,680

636,380

Households

Mean Property Price (£)

Q3 2011

210,470

176,744

245,426

Number of Property Sales

1,891

15,192

175,299

Median Affordability Ratio

2010

7.38

5.70

6.65

Lower Quartile Affordability Ratio

7.93

5.95

6.53

Employment

Employment Rate (%) 16-64

Oct 2010 – Sept 2011

71.9

67.0

70.1

Economic Inactivity Rate (%) 16-64

23.8

26.2

23.8

Economic Activity Rate (%) 16-64

76.2

73.8

76.2

Economic Activity Rate (%) 16-64 Males

82.1

80.8

82.6

Economic Activity Rate (%) 16-64 Females

70.6

66.8

69.9

% Employed in Public Administration & Defence

2010

4.5

5.5

5.6

% Employed in Education

10.4

10.7

9.7

% Employed in Health

13.4

13.3

12.9

% Employed in Production

15.9

13.6

9.9

% Employed in Retail

11.7

10.4

10.3

% Employed in Professional, Scientific and Technical

4.3

4.6

7.2

% Employed in Professional Occupations

Oct 2010 – Sept 2011

22.0

17.6

19.6

% Employed as Managers, Directors & Senior Officials

13.8

9.6

10.1

% Employed in Associate Prof & Technology Occupations

12.6

12.3

14.0

% Employed in Elementary Occupations

10.0

12.6

11.0

Average Gross Annual Earnings Residence (£)

2011

25,330

24,568

26,615

Average Gross Annual Earnings Workplace (£)

22,685

24,550

26,601

Difference Between Residence & Workplace Earnings (%)

10.4

0.1

0.1

Unemployment

Working Age Claimants

May 2012

10,561

164,526

1,308,638

Unemployment Rate (%) 16-64

3.0

4.8

3.9

Unemployment Rate (%) 18-24

7.6

9.6

7.7

Economy

Number of active businesses

2011

25,425

206,915

2,161,190

GVA Per Resident Head (£)

2009

15,196

16,602

20,000 (UK)

Education

GCSE 5+ A* - C (%)

2010/11

79.9

 

GCSE 5+ A* - G (%)

93.3

A-Levels 1+ A* - B (%)

54.4

A-Levels 2+ A* - B (%)

38.0

A-Levels 3+ A* - B (%)

24.1

Further Information

In this section

 

 

More Information

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This page was last reviewed 13 February 2014 at 13:55.
The page is next due for review 12 August 2015.