Norwich Economic Barometer

Transcription

1 November 217 Norwich Economic Barometer

2 Contents Business news 3 Economy Business Education Claimant count unemployment 9 Table 1 Claimant count rate unemployment Ward level jsa claimant count unemployment 11 Table 2 Claimant count unemployment Claimant count unemployment: age/duration 12 Housing benefit 13 Table 3 Norwich City Council housing benefit claimants Young people (16-18 years) not in education, employment or training (NEET) 14 Average house prices 14 Appendix 15 Page 2 Norwich Economic Barometer

3 Business news Economy According to The Office for National Statistics (ONS), the Consumer Prices Index including owner occupiers housing costs (CPIH) 12-month inflation rate was 2.8 per cent in October 217, unchanged from September 217. The inflation rate for food and non-alcoholic beverages continued to increase to 4.1 per cent, the highest since September 213. Rising prices for food and, to a lesser extent, recreational goods provided the largest upward contributions to change in the rate between September 217 and October 217. The upward contributions were offset by falling motor fuel and furniture prices, along with owner occupiers housing costs, which remained unchanged between September 217 and October 217, having risen a year ago. The Consumer Prices Index (CPI) 12-month rate was 3. per cent in October 217, unchanged from September 217. Figure 1 CPIH: per cent change over 12 months The UK manufacturing sector started the final quarter of the year on a solid footing. Production and new order volumes continued to rise at robust rates, as companies benefited from strong domestic market conditions and rising inflows of new export business. Price pressures remained elevated, however, with rates of inflation in input costs and output charges both accelerating and staying well above historical series averages. Figure 2 shows that the seasonally adjusted IHS Markit/CIPS Purchasing Managers Index (PMI ) registered 56.3 in October, up from 56. in September (revised from the original reading of 55.9). The headline PMI has now signalled expansion for 15 consecutive months. UK manufacturing production rose at an identically solid pace to that registered in the prior survey month during October. The expansion was broad-based by sub-sector, with consumer, intermediate and investment goods producers all registering output growth. Page 3 Norwich Economic Barometer

4 Figure 2 IHS Markit/CIPS UK Manufacturing PMI Source: IHS Markit Figure 3 IHS Markit/CIPS UK Construction PMI Source: IHS Markit/CIPS Page 4 Norwich Economic Barometer

5 UK construction companies signalled that business conditions remained subdued during October. Output growth was largely confined to house building, which partly offset lower volumes of civil engineering and commercial activity. Moreover, the balance of construction firms expecting an increase in business activity over the next 12 months eased to its weakest since December 212. Caution in terms of the outlook for construction workloads meant that employment numbers increased at one of the slowest rates seen over the past four years. Figure 3 shows that at 5.8 in October, up from 48.1 in September, the seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers Index (PMI ) moved back above the 5. no-change mark. However, the latest reading was weaker than the post-crisis trend (54.7) and signalled only a marginal rise in overall construction output. Commercial building decreased for the fourth month running in October. A solid increase in residential building work underpinned the slight upturn in overall construction output during October. Figure 4 IHS Markit / CIPS UK Services PMI Page 5 Norwich Economic Barometer

6 UK service providers indicated that business activity growth improved on its recent underwhelming trend in October as shown in Figure 4. The latest expansion of service sector output was the fastest since April, supported by improved order books and resilient client demand. Service providers also revealed a positive development in terms of operating expenses as the rate of input cost inflation eased to its lowest since September 216. However, the rate of job creation slipped to a seven-month low and confidence towards growth prospects remained muted. Fragile sentiment regarding the year ahead business outlook was linked to entrenched economic uncertainty and worries about business investment among clients. At 55.6 in October, up from 53.6 in September, the headline seasonally adjusted IHS Markit/CIPS Services PMI Business Activity Index signalled a shift in momentum across the services economy. The latest reading was slightly stronger than the post-crisis trend and signalled the fastest pace of business activity growth for six months. Figure 5 shows that UK households saw financial pressures ease in October, as signalled by the latest seasonally adjusted IHS Markit Household Finance Index (HFI) registering 43.8 in October, up from The figure represented the weakest financial strain recorded for four months, matching that in June. A further increase in workplace activity alongside softening inflation perceptions combined to help ease the strain on current UK household finances. That said, households need for unsecured credit continued to rise, which alongside a fall in income for the first time since January were the main negative developments in October. Figure 5 IHS Markit Household Finance Index Source: IHS Markit/CIPS Page 6 Norwich Economic Barometer

7 Sales of non-food items grew at the slowest pace since records began as families chose days out over shopping, the British Retail Consortium (BRC) has said. Non-food sales rose by just.2 per cent in the year to October, the weakest growth since the BRC began measuring the category in January 211. The BRC said the figures would give retailers cause for concern in the run up to Christmas. Clothing sales were particularly hard hit, the BRC said. Total retail sales, including food, rose just.2 per cent last month, compared with 2.4 per cent last year. On a likefor-like basis, which excludes new store openings, sales were down 1 per cent. The East of England regional economy picked up in October helped by an increase in export orders whilst new jobs were created at the fastest pace in six months, according to a key survey of purchasing managers. The Lloyds Bank East of England PMI rose to 57.3 in October up from 55.5 in September and stayed well above the 5 level which denotes growth. Firms reported increased international demand for products and services and many hired extra staff to meet rising demand. But rising raw material prices prompted firms to increase selling prices for goods and services at a faster pace than the previous month. The East of England is bucking a national trend with an increase in the number of businesses reporting growth, according to R3. It found that the share of firms in the region reporting one or more signs of growth rose to 64 per cent in September, up from 59 per cent in the month a year ago. The region s industrial property market remains strong with rents expected to continue rising although occupier demand for retail space is flat and falling in the office sector, according to the latest East of England RICS commercial market survey. Rent expectations remained strong for industrial properties but were more subdued in the office and retail sectors. Meanwhile, the investment market appears healthier than the occupier sector although investment enquires rose across the board. Nationally, occupier demand in the quarter held steady with 5 per cent more respondents seeing an increase as sentiment picked up. Demand for industrial space rose by a net balance of +28 per cent and two thirds of respondents said the market was fairly valued. But over a third of respondents in the South East felt values were stretched relative to fundamentals A majority of manufacturers are planning to spend more on plant and machinery over the coming two years and a third of firms say Brexit has had no impact on their plans, according to an EEF/Santander survey. However the survey also highlights concerns over the pace of adoption of automation and its impact on productivity and the share of turnover which manufacturers have invested in new plant and machinery has fallen to 6.5 per cent from 7.5 per cent last year. Thirty seven per cent of adults in the region say they are worried about their current level of debt, with almost half citing credit card repayments as the source of their concern says R3. Threein-ten East of England adults say they often or sometimes struggle to pay day, with the cost of food highlighted by nearly two-thirds of these respondents as a key reason for their cash flow difficulties. Two-in-five cite making Page 7 Norwich Economic Barometer

8 credit card repayments as a cause of their pay day struggles, with a similar proportion listing spending on household energy, excluding petrol and diesel. The figures are echoed at a national level. Businesses in the East of England reported more than 38m lost to fraud in the last year. Norfolk accounted for 1.36m, in 453 incidents, while Suffolk firms lost 354,164 in 22 reported incidents in 216/17. Business Norwich-based analytics specialist ServiceTick has been acquired by a group backed by a major Silicon Valley investor. The company has become the fourth acquisition for technical services provider Davies Group since Californian private-equity investors HGGC took a majority stake in it in January. ServiceTick managing director Jason Wolfe said the deal could lead to further growth in Norwich for the 25-strong firm, which specialises in offering insight into customers buying habits and shopping experiences through voice and digital surveys, analytics and consulting. Enterprise advisers Nwes have developed Start&Grow, a new programme of business support which aims to simplify the process of starting and scaling a business by bringing all its advice together in one place online. Start-ups and growing businesses across the country will have access to free round-the-clock business support via smartphone or laptop through the new personalised video e-learning platform which was created, developed and built in East Anglia. The idea of this ground-breaking platform is that it s user-driven and rooted in practical real-life experiences and advice, giving people an opportunity to build and plan their business the way they want to. A plan to boost digital tech skills to meet growing demand in Norfolk and Suffolk has been signed by the New Anglia Skills Board and supported by SkillsReach. The 217 TechNation Report listed Ipswich and Norwich as tech clusters with high growth potential, with a combined GVA of 328m, employing more than 17,5 people and with more than 2 new start-up businesses since 211. They are also facing increasing demand for specialist skills from large firms and public sector bodies and an estimated 1, tech roles will be needed in Suffolk and Norfolk by 224. The aim is to place employers at the centre of decisionmaking on skills and to open alternative career routes such as apprenticeships and internships and e-learning. A new Norwich insurance broker is hoping to target the burgeoning sharing economy with a new brand of product. Inlet has designed its product range to cater to AirBnB hosts and parking space rentals, including host insurance for homeowners and landlords, house swap cover, landlord protection and parking host cover for people letting their driveways or garages. The company was founded by Louise Birritteri, former head of pricing at Co-op Insurance. Primark will move into the former BHS St Stephens Street premises for the next 18 months while it extends its existing store in Gentleman s Walk. The BHS building has been empty since August 216. The agent for the building says that discussions are already taking place over a longer-term arrangement with major retailers beyond 219, with the hope that Primark s improvements to the building and a longer lead-in time will entice a big name. Page 8 Norwich Economic Barometer

9 Norwich-based Cornwall Insight, an energy research and consultancy business, is aiming to enter European markets after securing substantial backing from an investment firm. The company is planning to open an office in Dublin and could target other markets in western Europe after receiving minority investment from private equity fund BGF Norwich ranks among the top 5 places to live in the UK. According to the Sunday Times, it has everything you want from a city, enclosed in a neat, pretty little package. In summary, the property experts said they loved Norwich for being a small city with big ideas. Regional & City Airports (RCA), the airports management division of Rigby Group plc which owns Norwich Airport, has completed its fourth regional UK airport acquisition with the purchase of Bournemouth Airport for an undisclosed sum underlining the group s ongoing intent to being a significant player in the UK s vital regional airports market. Education The Judges of the renowned TIGA games industry awards have named Norwich University of the Arts the UK s Best Educational Institution 217. The accolade was announced at an awards ceremony at the V&A in London in November as TIGA played host to big name brands, studios and professionals from across industry. Now in their fifth year, the awards honour the best games, businesses and practitioners in the UK games sector. The judges were looking for a world-leading educational institution with a track record of delivering high proportions of its students into graduate level jobs and with strong links with industry. NUA was one of eight universities around the UK in the running for the best institution award, and was also a finalist in the Best Education Initiative and Talent Development category. Seven scientists at Norwich Research Park have been listed by citation service Web of Science as in the top 1% of their specialism for most cited works. The researchers come from The Sainsbury Laboratory and University of East Anglia (UEA), they are: Prof Cyril Zipfel, Prof Sophien Kamoun, Prof Jonathan Jones and Dr Joe Win from the Sainsbury Laboratory and Phil Jones, Andy Jordan and David Livermore from the UEA. The University of East Anglia (UEA) is helping students and staff develop their business skills with its first entrepreneur in residence, Jacyn Heavens, CEO of Epos Now, who will give advice and support on their current and potential ventures. Claimant count unemployment FThe claimant count measure counts the number of people claiming Jobseeker s Allowance plus those who claim Universal Credit and are required to seek work and be available for work and replaces the number of people claiming Jobseeker s Allowance as the headline indicator of the number of people claiming benefits principally for the reason of being unemployed. Figure 6 shows the trend in claimant count unemployment since 214. Rates have fallen noticeably since the beginning of the period. The rate in the Norwich City Council area started the period significantly above the national, regional, New Anglia LEP and the Norwich urban (built-up) area rates. During the past year the gap narrowed and again, this month the trend has continued. Page 9 Norwich Economic Barometer

10 Figure 6 Claimant count unemployment 214 to 217 Table 1 Claimant count rate unemployment October 217 September 217 October 217 Monthly change Annual change Great Britain 73,54 1.8% 765,825 76,3 +.1% East of England 45, % 48,14 1.3% 48,36 1.3% +.1% New Anglia LEP 12, % 13, % 13, % +.1% Norwich City Council area* 1,64 1.7% 1,59 1.7% 1, % Norwich urban area** 2,2 1.4% 1,95 1.4% 1, % Table 1 shows that the each of the areas saw an increase in claimant count unemployment rates over the year except for the two Norwich areas which saw a marginal fall in the rate. Unemployment rates remained static across all the areas compared to the previous month, except for the two Norwich areas where the rate fell slightly. *The Norwich City council area comprises the following wards: Bowthorpe, Catton Grove, Crome, Eaton, Lakenham, Mancroft, Mile Cross, Nelson, Sewell, Thorpe Hamlet, Town Close, University, Wensum. ** The Norwich urban area comprises the following wards: Drayton North, Drayton South, Hellesdon North West, Hellesdon South East, Old Catton and Sprowston West, Sprowston Central, Sprowston East, Taverham North, Taverham South, Thorpe St Andrew North West, Thorpe St Andrew South East, Bowthorpe, Catton Grove, Crome, Eaton, Lakenham, Mancroft, Mile Cross, Nelson, Sewell, Thorpe Hamlet, Town Close, University, Wensum, Cringleford, New Costessey, Old Costessey, Page 1 Norwich Economic Barometer

11 Ward level Claimant count unemployment Table 2 JSA Claimant Count Unemployment October 216 September 217 October 217 Monthly change Annual change Bowthorpe % % % Catton Grove % Crome % % +.2% Eaton 3.6% 3.6% 3.5% Lakenham % % +.1% +.3% Mancroft % % % -.2% -.3% Mile Cross % % % -.3% Nelson 5.7% 45.6% 45.6% Sewell 1 1.4% % % +.1% Thorpe Hamlet % % Town Close % % % +.1% University 65.8% 6.7% 6.7% Wensum % % Compared to this time last year, unemployment rates increased slightly in Crome, Lakenham, Sewell and Town Close wards. All other wards saw a marginal reduction in rates. Over the month, the unemployment rate grew slightly in Lakenham. Rates in Bowthorpe, Eaton and Mancroft wards fell slightly and rates in all other wards were unchanged; Figure 5 demonstrates that the wide variation in ward JSA rates across the city council area is clearly evident. The differential between the lowest (Eaton) and the highest (Mancroft) rates currently stands at 2.2 percentage points. Page 11 Norwich Economic Barometer

12 Figure 7 Norwich wards JSA unemployment 214 to 217 Claimant count unemployment: Age and Duration Gender: in the city council area, one in every three (32 per cent) out-of-work claimants is a woman. Over the month, female rates remained unchanged across the Norwich area (1.1 per cent), at the national level (1.5 per cent), across the LEP area (1.1 per cent) and regionally (1 per cent). The male unemployment rate is higher in Norwich (at 2.2 per cent of working age males) than in the LEP area (1.7 per cent), regionally (1.5 per cent) and nationally (2.3 per cent). Over the month, rates remained unchanged across each of the reported areas. Norwich s male unemployment rate has remained higher than rates in the LEP area and at the regional and national levels since records began in However, the current male claimant count rate in Norwich is one of the lowest ever recorded and is on par with the national rate. It is likely that Norwich s relatively high levels of male unemployment can be attributed to the steady loss of manufacturing jobs and the dominance of the service sector in Norwich. Duration: a certain level of churn is to be expected within the labour market as people move between unemployment, welfare benefits and employment. In Norwich 52.9 per cent of JSA unemployment claims are for a period of less than six months; higher than the proportion seen across the LEP area (51.8 per cent, nationally (47.6 per cent) and regionally (52.8 per cent). The percentage of JSA claimants who are recorded as being unemployed for more than 12 months stands at 29.2 per cent in Norwich compared to 33.8 per cent in the LEP area; 29.2 per cent regionally and 34.7 per cent nationally. Relative to the previous month, the percentage of longterm unemployed increased slightly across each of the reported areas. Page 12 Norwich Economic Barometer

13 It is widely recognised that long periods of unemployment make it increasingly difficult for affected individuals to find work, particularly in a weak labour market. Over the year, the number of people recorded as long term unemployed in Norwich has fallen from 375 people in October 216 to 28 currently. Age: For the year old age group, the JSA unemployment rate stands at 1.6 per cent in Norwich; 1.4 in the LEP area; 1.3 per cent regionally and 1.9 per cent nationally. Wensum, Catton Grove, Thorpe Hamlet, Crome, Lakenham, Mile Cross and Mancroft wards have proportions of claimants aged years above that of the Norwich average. At the other end of the age scale, Norwich has a higher rate of JSA unemployment claimants aged 5 years and older (1.4 per cent, 295 people) compared to the LEP area (.7 per cent) and regionally (.8 per cent) and nationally (1.2 per cent). Housing benefit Housing benefit is an income related benefit designed to help people on low incomes pay for rented accommodation whether in, or out, of work. Many housing benefit claimants are pensioners, people with disabilities, carers or people who are in low waged work. It should be noted that resident earnings in Norwich are relatively low and this will be a contributing factor to the number of people claiming housing benefit. Table 3 Norwich City Council housing benefit *** claimants Number of claimants Monthly change October 216 November 216 December 216 January 217 February 217 March 217 April 217 May 217 June 217 July 217 August 217 September 217 October ,22 16,954 16,948 16,884 16,871 16,811 16,72 16, ,79 16,631 16,521 16, ( -.7%) - 68 ( -.3%) - 6 (-.3%) - 64 (-.3%) - 13 (.7%) - 6 (-.3%) - 91 (-.5%) +86 (+.5%) - 24 (-.1%) - 73 (-.4%) - 78 (-.4%) - 11 (-.7%) (-.9%) Table 3 shows that the number of housing benefit claimants in the Norwich local authority area fell by 155 claims during October. Over the year, housing benefit claims in Norwich have fallen by 3.8 per cent. Comparable national data is not available because of a time lag in data collection. *** Housing benefit numbers include people who are claiming council tax benefit only. Page 13 Norwich Economic Barometer

14 Young people (16-18 years) recorded as Not in Education, Employment or Training (NEET) The latest update (November 216) received from Norfolk County Council is that Norwich s NEET figure stands at 6.1 per cent compared to 3.8 per cent at the county level. Average House Prices Figure 8 HM Land Registry average house prices The House Price Index produced by HM Land Registry is the most accurate and independent house price index available for England. According to HM Land Registry s House Price Index (Crown copyright) over the year, average house prices increased by 5.2 per cent in Norwich and 5.7 per cent across England. Figure 6 summarises average house price movements since September 214. During the month of September, average house prices grew by 2 per cent in Norwich and by.6 per cent in England compared to the previous month. The average house price in Norwich currently stands at 22,22 against 243,945 for England. Page 14 Norwich Economic Barometer

15 Appendix Contact details: Sharon Cousins-Clarke, Economic Development, Norwich City Council e: Data Sources: Figure 1: CPIH: per cent change over 12 months - ONS Figure 2: IHS Markit/CIPS UK Manufacturing PMI Figure 3: IHS Markit/CIPS UK Construction PMI Figure 4: IHS Markit / CIPS UK Services PMI Figure 5: IHS Markit Household Finance Index Figure 6: Claimant count NOMIS, Crown copyright Figure 7: Ward unemployment NOMIS, Crown copyright Figure 8: House Price Index, HM Land Registry, Crown copyright Tables 1 and 2: Claimant count NOMIS, Crown copyright Table 3: Housing benefit claimants Norwich City Council News stories from a variety of sources including EDP/Evening News; Business in East Anglia; Office of National Statistics; Reuters; BBC; Markit/CIPS PMI; Markit Monthly Economic Overview: University of East Anglia; Norwich University of the Arts, City College Norwich. Page 15 Norwich Economic Barometer

16 12/217 If you would like this information in another language or format such as large print, CD or Braille, please call or