We have now come to the final part in our series looking at various trends that have been revealed by our annual data update. In the five previous pieces we have looked at past and present data relating to demographics, industries, occupations, regional variations and proprietor data. In this last piece we are going to look at what the future might hold for the British economy.
As any weather forecaster will tell you, forecasting is never an exact science. There will always be unforeseen changes which prevent wholly accurate forecasting, and of course the longer the range of prediction, the less certainty there is of accuracy. So with economic forecasting. Our predictions are based both on past trends and the current state of the economy, but of course we have no way of knowing whether Company A is about to announce the closure of its plant in Town B, leading to the loss of C number of jobs — all of which will affect the economy in ways that cannot be predicted beforehand. All other things being equal, however, the data below, which is taken from our Analyst tool, will give you a good indication of the direction the British labour market is headed in over the next few years. Although Analyst can forecast right up to 2020, we will be looking only as far as 2018, in order that the predictions may retain as much accuracy as possible.
The Big Picture
As with our previous pieces, let’s just begin with the overarching narrative:
1. In terms of demographics, the population of Britain in 2013 was 62,429,250 and this is set to rise to 64,901,835 by 2018 — a rise of 2,472,585.
2. Looking at industries and occupations, our data shows that in 2013 there were 28,241,189 in employment in various occupations across all industries in Britain, but by 2018 we are forecasting that employment will have risen to 29,061,655 — an increase of 820,466.
3. Regarding regional variations, our data shows that all government office regions without exception are set to see increases in employment numbers over the next few years.
4. Our proprietor data shows that in 2013 there were 1,071,323 proprietors and we are forecasting this to rise to 1,089,698 by 2018 — an increase of 18,375 or 2%.
Before continuing, just a note about the employment data in point number 2. It might seem from this data that we are saying there will be less unemployment in 2018 than in 2013. However, this is not necessarily the case. Our data shows that there is likely to be an increase in employment numbers, but this must be taken in conjunction with the fact that the population is also set to increase over the same period. It is therefore by no means certain that an increase in employment numbers will automatically mean less unemployment, though it may well be the case.
We can dig down into each area covered over the past five articles to see where the trends are taking us. Beginning with demographics, we have seen already that the population of Britain looks set to rise over the next five years, but where will this increase be? The table below shows the population of Britain by age, comparing 2013 to 2018:
Table: Population of Britain by Age – 2013-2018
|Age Group||2013 Population||2018 Population||Change||% Change|
|Source: EMSI Covered Employment - 2014.1|
|Under 5 years||3,949,857||4,149,274||199,417||5%|
|5 to 9 years||3,619,414||3,959,450||340,036||9%|
|10 to 13 years||2,678,995||2,941,611||262,616||10%|
|14 to 15 years||1,433,225||1,358,991||-74,234||-5%|
|16 to 18 years||2,248,567||2,048,378||-200,189||-9%|
|19 to 24 years||5,058,371||4,868,166||-190,205||-4%|
|25 to 29 years||4,313,981||4,614,051||300,070||7%|
|30 to 34 years||4,231,029||4,446,606||215,577||5%|
|35 to 39 years||3,852,915||4,262,576||409,661||11%|
|40 to 44 years||4,355,249||3,846,370||-508,879||-12%|
|45 to 49 years||4,540,206||4,318,858||-221,348||-5%|
|50 to 54 years||4,213,967||4,495,183||281,216||7%|
|55 to 59 years||3,636,881||4,126,090||489,209||13%|
|60 to 64 years||3,428,786||3,505,992||77,206||2%|
|65 to 69 years||3,383,831||3,244,651||-139,180||-4%|
|70 to 74 years||2,468,922||3,140,586||671,664||27%|
|75 to 79 years||2,039,276||2,188,114||148,838||7%|
|80 to 84 years||1,518,481||1,665,878||147,397||10%|
|85 years and over||1,457,298||1,721,009||263,711||18%|
There are a number of things of interest in this data. For example, we can see that the birth rate looks set to increase, with a rise of 199,417 in the under-fives age group. Elsewhere, we can see that there are big population falls amongst 14-24-year-olds and 40-49-year-olds — something that was picked up on and explained in the first part of this series on demographics.
But surely the big news is in the older age categories. The 70-74 age range — part of the so-called “baby boomer” generation — is set to see the biggest increase of all, with 671,664 more people in this age range in 2018 than in 2013. The increase in over 80s is also hugely significant, with 147,397 more 80-84 year-olds predicted by 2018 and 263,711 more 85s and over — increases of 10% and 18% respectively.
In total, the numbers of people in the post-65 age group is set to reach 11,960,238 by 2018 — 18.4% of the entire population — which means that there will be nearly 1.1 million more retirees in 2018 than in 2013. At the same time, the numbers of working age people — the 16-64 age group — is set to grow by just 652,318. In other words, by 2018, there will be over 400,000 more retirees than workers than there was in 2013.
All this raises some pretty big questions about how this country will cope. One thing that is certain to happen is the raising of the state pension age, the Pensions Act 2011 already having brought forward the rise in the state pension age for women to 65 by 2018, and the increase for both men and women to 66 by October 2020. But the sheer size of these figures casts doubt on whether this will really do anything like enough to solve what is clearly going to present enormous problems. Interesting times, to say the least, are ahead of us.
Future of Industries
Moving on to industries, we can take a high-level look at where we can expect to see growth and decline over the next few years. The following table shows industries at the 1-digit SIC level:
Table: Industry Change 2013-2018
Description 2013 Jobs 2018 Jobs Change
Source: EMSI Covered Employment - 2014.1
PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES 2,285,427 2,482,216 196,789
ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES 2,385,321 2,530,891 145,570
CONSTRUCTION 1,326,181 1,409,580 83,399
ACCOMMODATION AND FOOD SERVICE ACTIVITIES 1,883,563 1,961,585 78,022
ARTS, ENTERTAINMENT AND RECREATION 705,435 781,502 76,067
WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES 4,509,890 4,584,720 74,830
HUMAN HEALTH AND SOCIAL WORK ACTIVITIES 3,726,004 3,787,603 61,599
REAL ESTATE ACTIVITIES 553,106 607,787 54,681
INFORMATION AND COMMUNICATION 1,094,882 1,146,409 51,527
TRANSPORTATION AND STORAGE 1,246,024 1,291,862 45,838
FINANCIAL AND INSURANCE ACTIVITIES 1,047,149 1,085,294 38,145
WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES 180,468 199,223 18,755
OTHER SERVICE ACTIVITIES 552,832 568,060 15,228
EDUCATION 2,567,816 2,568,684 868
MINING AND QUARRYING 65,872 61,691 -4,181
AGRICULTURE, FORESTRY AND FISHING 336,890 331,165 -5,725
ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY 111,831 103,353 -8,478
PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL SECURITY 1,340,277 1,316,069 -24,208
MANUFACTURING 2,322,221 2,243,962 -78,259
Total 28,241,189 29,061,655 820,466
The biggest growth is set to come in Professional, scientific and technical activities, which are industries that require a high degree of training/specialized knowledge and skills, such as Architectural and engineering activities; Scientific research and development; and Veterinary activities. Drilling down within this industry to the 4-digit SIC level, we find that the biggest increases are set to be in the Activities of head offices sector (42,253 more jobs); Accounting, bookkeeping and auditing activities; tax consultancy (39,662 more jobs) and Business and other management consultancy activities (27,959 more jobs).
At the other end of the scale, Manufacturing looks set to see its seemingly endless decline, with 78,259 fewer people employed in Manufacturing industries in 2018 than in 2013. In fact, looking over our complete data set, which goes all the way back to 2003, we can see that over the 15 year period from 2003 to 2018, Manufacturing employment will have fallen from 3,132,874 to 2,243,962 — a decline of 888,912 jobs. When you set this beside the next biggest declining industry over the same period — Wholesale and retail trade; repair of motor vehicles and motorcycles with 255,104 less jobs forecast for 2018 than in 2003 — you can see just how massive has been the collapse of this industry. As with the ageing population problem mentioned above, this raises fundamental questions about the future: Is the near collapse of the British Manufacturing sector, not just over the last 15 years but since the Second World War, compatible with a sustainable economy in the long term? If not, what can be done to address this situation?
Drilling down further than the 1-digit SIC level, we can see where the biggest increases within the most specific industry classifications are set to occur. The graph below shows the top ten growth industries at the 4-digit SIC level from 2013-2018:
There are big increases in service sectors, such as Restaurants and mobile food service activities (59,734 more jobs), as well as financial sectors such as Activities auxiliary to financial services and insurance activities (51,864) and Accounting, bookkeeping and auditing activities; tax consultancy (39,662). The Construction of residential and non-residential buildings is also set to see good increase with nearly 33,000 more people employed in this sector in 2018 than in 2013.
Future of Occupations
Having looked at some of the headline features for industries, we can now do the same exercise for occupations. The table below gives a high-level look at occupations, showing the changes in employment over the next few years at the 1-digit SOC level:
Table: Occupation Change at the 1-Digit Level – 2013-2018
Description 2013 Jobs 2018 Jobs Change % Change Annual Openings
Source: EMSI Covered Employment - 2014.1
Professional Occupations 5,249,603 5,458,920 209,317 4% 256,286
Associate Professional and Technical Occupations 3,722,493 3,907,153 184,660 5% 180,514
Managers, Directors and Senior Officials 2,846,089 2,980,224 134,135 5% 154,197
Elementary Occupations 3,833,308 3,943,105 109,797 3% 177,585
Caring, Leisure and Other Service Occupations 2,526,919 2,635,670 108,751 4% 130,869
Sales and Customer Service Occupations 2,590,754 2,642,819 52,065 2% 105,739
Skilled Trades Occupations 2,316,698 2,339,042 22,344 1% 99,295
Administrative and Secretarial Occupations 3,497,147 3,515,712 18,565 1% 169,066
Process, Plant and Machine Operatives 1,658,178 1,639,011 -19,167 -1% 73,275
Total 28,241,189 29,061,655 820,466 3% 1,346,824
Given that the industry data above showed us Professional, scientific and technical activities is set to be the fastest growing industry sector, it is not surprising that the biggest increases in occupations look set to be in Professional occupations (increase of 209,317) and Associate professional and technical occupations (184,660).
One noteworthy feature of this table is the annual openings column. The fact that one sector has a higher overall increase in jobs doesn’t necessarily mean that there are more employment opportunities in that occupation. For example, the Managers, directors and senior officials sector is set to grow by 134,135 jobs, whilst the Administrative and secretarial occupations sector is set to grow by just 18,565 jobs. However, when we look at the number of annual openings, we find that there are actually more in the Administrative and secretarial occupations (169,066 ) than there are in Managers, directors and senior officials (154,197). The reason for this is that there is clearly a much higher turnover in jobs like Administrative and secretarial occupations, when compared to some other sectors, such as Managers, directors and senior officials. This is important to bear in mind, as we might be tempted to take the headline employment figure and assume that there is not going to be much demand in a sector which is not showing much growth, when in actual fact there may well be a big demand for such roles.
Looking at occupations at the 4-digit level, the following graph shows the top ten occupations in terms of increased employment between 2013 and 2018:
We can see that the demand for Care workers and home carers continues its meteoric rise with another 33,460 people expected to be employed in this sector by 2018. It is worth doing the same exercise here that we did for Manufacturing above — looking at the total numbers over the period 2003-2018. What we find is that the increase in Care workers and home carers over this 15 year period far outstrips the next highest occupation increase over the same period. Employment numbers in the Care workers and home carers sector are set to increase by a massive 229,559 compared to the next highest occupation — Teaching assistants — which is set to rise by 93,275 over the same period.
Future Regional Variations
So far we have looked at the future of population demographics, industries and occupations, drilling down from high-level to low-level in each category. We can now drill down geographically, to find out what the future might hold for regions of the country. The table below shows employment in Britain 2013-2018 by government office region:
Table: Regional Change 2013-2018
|Gov't Office Region||2013 Jobs||2018 Jobs||Change||Annual Openings|
|Source: EMSI Covered Employment - 2014.1|
|South East (UKJ)||3,987,866||4,120,046||132,180||193,600|
|East of England (UKH)||2,611,363||2,712,536||101,173||130,479|
|South West (UKK)||2,415,253||2,505,241||89,988||121,538|
|West Midlands (UKG)||2,413,536||2,469,668||56,132||114,219|
|East Midlands (UKF)||1,978,104||2,029,099||50,995||94,454|
|Yorkshire and the Humber (UKE)||2,250,492||2,300,815||50,323||106,249|
|North West (UKD)||3,098,152||3,146,940||48,788||141,721|
|North East (UKC)||1,036,733||1,041,920||5,187||45,931|
London and the South East look set to grow in terms of employment, with London passing 5 million and the South East passing 4 million jobs by 2018. As mentioned above in the Occupations Future section, it is essential that we take note of the annual openings, not just the headline employment figure. For example, the North West is 7th on the list in terms of actual job change over the next few years, with an increase of 48,788. However, in terms of numbers of openings, the region makes it to 3rd on the list, ahead of the East of England, with a total of 141,721 annual openings. This might well suggest that the North West is likely to see a large increase in the type of occupations which generally tend to have a fairly high turnover.
As we showed in our fourth piece in this series — Regional Variations — Analyst has the ability to drill right down to County/Unitary Authority level, and even to Local Authority level. Looking at the County/Unitary Authority level, where can we expect to see the biggest increases and declines in employment?
As you can see, the big growth areas over the next five years are in London, with the two inner London areas expected to see another 163,327 jobs added. As for the decreases, there are not really any huge numbers, although the 3,996 fewer jobs expected in Inverclyde, East Renfrewshire and Renfrewshire are fairly significant for that area.
Future of Proprietors
The final area that we need to look at in this series is the future of proprietors. In the 5th piece of this series, we looked at proprietor numbers over the past ten years and found that there had been a steep rise from 2006-2008, followed by a much steeper decline from 2008-2010. Over the entire period 2003-2013, proprietor numbers fell by 239,850. As we mentioned at the start of this piece, proprietor numbers are set to increase over the next few years, although the growth is set to be fairly slow with 18,375 more proprietors in 2018 than there were in 2013. Even with this rise, however, the numbers of proprietors in 2018 will still be 221,475 lower than back in 2003.
So if the number of proprietors is set to grow by 18,375 over the next few years, where specifically is this growth likely to be seen? The following table shows the fastest growing industries in terms of proprietors between 2013 and 2018:
Table: Top 10 Fastest Growing Proprietor Industries at 4-Digit SIC Level – 2013-2018
|Description||2013 Jobs||2018 Jobs||Change|
|Source: EMSI Covered Employment - 2014.1|
|Business and other management consultancy activities||29,288||33,560||4,272|
|Other professional, scientific and technical activities n.e.c.||14,750||17,333||2,583|
|Landscape service activities||9,134||11,626||2,492|
|Restaurants and mobile food service activities||37,756||40,183||2,427|
|Hairdressing and other beauty treatment||23,944||26,146||2,202|
|Painting and glazing||8,763||10,707||1,944|
|Plumbing, heat and air-conditioning installation||14,132||15,931||1,799|
None of the changes shown in the table is particularly vast, the most significant increases being in the Legal activities sector with a rise of 6,204 proprietors, and the Business and other management consultancy activities sector, with a rise of 4,272.
Looking at the future of proprietors in terms of occupations, the graph below shows the ten highest growth sectors over the next few years:
Again, the growth is not huge, although Farmers with a rise of 6,007, and Property, housing and estate managers, with a rise 3,320, are set to see fairly significant increases.
We have now come to the end of this series in which we have looked at the past, present and future of British demographics and economy, as revealed by our recent data update. Although we have covered a lot of ground, in many ways we have just scratched the surface of the capabilities of Analyst and of our data. However, we hope that what we have shown has been of interest and has whetted your appetite for learning more about the labour market in your own area.
For further information about EMSI’s data or Analyst, please contact Andy Durman (firstname.lastname@example.org)