Birmingham's Economy



Introduction
Birmingham is at the heart of the West Midlands region and is the regional centre of government, business, retail and leisure. Birmingham also provides employment for significant numbers of in-commuters from outside the city. As the regional centre for commerce and industry, Birmingham also provides a significant proportion of the higher paid employment in the region.

Birmingham has some of the most deprived areas in the country, with some of the highest rates of unemployment nationally and lower than average skill levels. Education results on the other hand are continuing to improve, with results in some education levels such as GCSEs, now better than national averages.

Birmingham is a large economy with annual economic output over £20bn. However relatively speaking GVA per capita and per worker is below the national average and mid ranking amongst the core cities. Birmingham has also experienced slower growth in GVA per head over the last decade than regionally, nationally and compared to most of the other core cities.

Birmingham is the largest city economy in the UK outside of London and has a growing reputation as an international business location.

For more detailed analysis of Birmingham's Economy visit www.birminghameconomy.org.uk

Key Facts and Statistics
Economy

 GVA output of Birmingham totalled £20.2bm in 2008 which accounted for 22% of output in West Midlands Region  Birmingham outperforms the regional average, underperforms compared to the national average and is mid-ranking in relation to core cities  GVA output of Birmingham £19,801 per capita compared with £21,103 across England  Birmingham is part of the £94 billion regional economy  In Cushman and Wakefield’s 2010 European Cities Monitor, of Europe’s leading business locations, in which Birmingham was ranked 18th overall and ranked 5th for value for money office space. It was also 4th best European city for the availability of office space and the 9th for ease of access to markets. )

The sectors which employ the highest proportion of people are:  Wholesale and retail trade; repair of motor vehicles and motorcycles (73,100 people 15% of workforce) Human health and social work activities (65,100, 14%)</li> Education (56,100, 12%).</ul> </li> Average median weekly wage of Birmingham residents is £381.40 </li> Average median weekly wage of people working in Birmingham is £413.10 </li> 44% of businesses started in 2004 survived more than 5 years. </li> Birmingham currently attracts over 32.8 million visitors every year, contributing to a visitor economy worth £4.6billion </li> With £2.43 billion expenditure in 2010, Birmingham remains in the top three most popular places to shop in the UK for the seventh year running </li> There are over 5,800 creative businesses in Birmingham </li> The National Exhibition Centre (NEC) and International Convention Centre (ICC) host over 200,000 conferences and 320 exhibitions every year </li> </ul>

Employment <ul> The number of residents claiming a workless benefit in Birmingham increased slightly to 125,710 in August 2011, 18.7% of the working age population</li> </li> Kingstanding and Washwood Heath wards have the highest worklessness rates, both at 27.6% and 27.2% respectively. Lozells & East Handsworth, Nechells, Sparkbrook, and Shard End also have worklessness rates above 25% </li> As of January 2012, Birmingham’s Seasonally Adjusted (SA) Unemployment rate (12.7%) was over twice the UK average (5.5%) </li> Birmingham has the highest Claimant Proportion and third highest Claimant Rate of the core cities (behind Nottingham and Manchester).</li> </li> Birmingham’s Male SA unemployment rate (15.7%) is nearly twice that of the Female SA unemployment rate (9.0%)</li> </li> </ul>

Education <ul> In Birmingham 19.4% of people aged 16 to 64 have no qualifications </li> 82.0% of pupils in 2010 gained 5 A* to C GCSE</li> </li> <li style="margin-left:20px;">54.9% of pupils gained 5 A* to C GCSEs including English and Maths compared to a national average of 53.4% </li> <li style="margin-left:20px;">Pupils in Birmingham schools have an overall absence rate of 6.8% with a persistent absence rate of 4.1%. Both slightly lower than English averages. </li> <li style="margin-left:20px;">3 universities and 2 university colleges in Birmingham and 15 universities and 3 university colleges within a 1 hour drive </li> <li style="margin-left:20px;">Total No. of HE students in Birmingham 73,345 (325,820 within a 1 hour drive)</li> <li style="margin-left:20px;">Total No. of graduates 97,760 (23,795 within a 1 hour drive)</li> </ul>

Transport

<ul> <li style="margin-left:20px;">Transport represents one of the largest items of weekly household spending at 14% for both the West Midlands Region and the UK </li> <li style="margin-left:20px;">Birmingham Airport currently provides access to 126 direct destinations across Europe, North America and Asia and handles 8.5 million passengers a year. The runway extension will increase this to an estimated 18 million passengers flying to an increased number of long haul destinations </li> <li style="margin-left:20px;">In the West Midlands train operators provide a total of 1,017 trains into the key rail hub of Birmingham New Street each weekday and a further 237 daily services into Birmingham Moor Street and Snow Hill stations.</li> <li style="margin-left:20px;">There were 41.8 million rail passenger journeys in the West Midlands during 2010/11, and increase of 4.5% on 2009/10) </li> <li style="margin-left:20px;">There was around 5 million journeys on the metro in 2010/11 </li> <li style="margin-left:20px;">The total number of Bus passenger journeys in 2010/11 was 300.2 million. (11.4million per 100,000) This includes 1.7 million journeys made on accessible transport </li> <li style="margin-left:20px;">Concessionary passenger journeys totalled around 96.1 million. 21 million of these were child and scholar, and 75.1 million of these were Senior Citizen, Blind and disabled customers </li> </ul>

Economic Output
Birmingham’s economic output totalled £20.2bn in 2008 which accounted for 22% of the total economic output in the West Midlands region. However, comparative measures of economic output such as output per capita or per worker shows that Birmingham is below the national average and is mid ranking amongst the eight English core cities. Birmingham’s position relative to other areas has also declined over the past decade.

The chart below left compares Birmingham’s GVA per head with the region, the UK and the other core cities. Birmingham outperforms the region but is below the national average and is mid ranking of the core cities

The chart below right compares GVA per worker - a proxy measure of productivity. The chart shows a similar pattern as for that of GVA per head shown above. Birmingham outperforms the regional average, underperforms the national average and is mid ranking in relation to the other core cities.

Birmingham’s position in relation to economic output per head has declined relative to other areas over the past decade. Chart below shows indexed growth in GVA per head between 2000 and 2008 – where Birmingham underperformed in comparison with many of the other core cities.



Inward Investment

The securing of new inward investment and the economic benefit that this brings to Birmingham is central to the future economic growth and prosperity of Birmingham as it brings new business and employment opportunities to the city. In recent years, Birmingham has been successful in attracting a number of significant inward investment projects and jobs from both the public and private sector. However, despite some notable successes, when the number of Inward Investment jobs are calculated as a proportion of the resident population, Birmingham’s performance is less positive.

Further findings of the 2010 IBM PLI report showed that Birmingham had a strong competitive position in a number of specific sub-sectors, which are expected to see high growth in the global market for investment. This presents a considerable opportunity for Birmingham. Specifically, the priority subsectors identified include: <ul> <li style="margin-left:20px;">HR/Legal Shared Service Centres; </li> <li style="margin-left:20px;">Financial Services; </li> <li style="margin-left:20px;">Green Automotive Production; </li> <li style="margin-left:20px;">Automotive low carbon R&D; and </li> <li style="margin-left:20px;">Digital Media</li> </ul>

Business Growth

The Beta Model holds data on the number of firms that are growing and shrinking in terms of the number of people they employ, which is displayed in Chart 1.19 below. The chart shows that Birmingham has a lower percentage of growing firms than the region and the UK and a higher percentage of shrinking firms, Birmingham also has a significantly higher percentage of shrinking firms than growing firms unlike the region and nationally who have similar shares of both.



Business Survival Rates

The chart below shows the number of firms started in 2005 nationally, and locally and gives percentages for how many of these businesses are still in existence at yearly intervals up to five years. At all stages from one to five years the survival rates of Birmingham businesses are lower than that of businesses nationally. At five years the survival rate in Birmingham is over four percentage points lower than that in England



Employment Structure
The table below uses the latest official workplace based employment data from the 2009 Business Register and Employment Survey (BRES) to show the employment structure in Birmingham by broad industrial sector. The chart shows that the public sector is the largest sector in Birmingham – accounting for around one third of all employment in the city. The next two largest sectors in terms of employment are Banking, finance and insurance with 22% of overall employment and Distribution, hotels and restaurants (which includes retail) with 19.5% of total employment.



Worklessness and Unemployment
Economic Activity

Figures from the Office for National Statistics for December 2010 show that there are 669,300 working age (16-64) residents in the city. Of these residents only 457,600 (68.4%) are economically active (in employment or actively seeking work). This is well below the national rate (76%) and is the third lowest rate of the eight English core cities.

Of those who are economically inactive, only 32,000 (16%) want a job. This is the lowest proportion of all the core cities, and well below the national rate of 24%.

Worklessness See - Worklessness Definition

Crucial to improving economic success in the city is improving employment opportunities for residents living in the city. The global recession has impacted upon the national economic climate, resulting in an increase in unemployment and worklessness claimant rates at local levels.



However Birmingham has always had a comparatively high proportion of residents who are workless. Data for August 2011 shows that 18.7% (125,710) of the working age population in the city are workless. This compares to a worklessness rate of 13.8% in the West Midlands region and 12.0% nationally. Birmingham has the second highest worklessness rate amongst the core cities - behind Liverpool (21.9%). Leeds and Greater London have the lowest worklessness rates of the major cities in England at 11.8% and 12.7% respectively.



Worklessness within Birmingham

Worklessness levels vary across the city. Hodge Hill constituency has the highest worklessness rate (23.9%). Sutton Coldfield constituency has the lowest unemployment rate (8.0%).

In terms of worklessness rate by ward, the Sutton Four Oaks, and Sutton New Hall have the lowest rates within Birmingham. Kingstanding ward has the highest rate at 27.6%.

The 5 wards with highest worklessness rate are:

<ul> <li style="margin-left:60px;">Kingstanding - 27.6%</li> <li style="margin-left:60px;">Washwood Heath - 27.2%</li> <li style="margin-left:60px;">Shard End - 26.9%%</li> <li style="margin-left:60px;">Nechells - 26.7%</li> <li style="margin-left:60px;">Sparkbrook - 26.5% </li> </ul>

Unemployment

Birmingham has a comparatively high proportion of the working age population claiming unemployment benefit.The chart below outlines changes in seasonally unadjusted unemployment rate as changed over the past few years.

As of January 2012, Birmingham’s Seasonally Adjusted (SA) Unemployment rate (12.7%) was over twice the UK average (5.6%) Birmingham has the highest Claimant Proportion and the highest Claimant Rate of the core cities. Birmingham’s Male SA unemployment rate (15.7%) is nearly twice that of the Female SA unemployment rate (9.0%).

Unemployment within Birmingham

Unemployment levels vary across the city. As with worklessness, unemployment is higher in the inner city areas, the inner-city constituency of Ladywood has the highest unemployment rate (27.4%). Sutton Coldfield constituency has the lowest unemployment rate (3.8%).

In terms of unemployment rate by ward, the Sutton Four Oaks, Sutton New Hall,, Sutton Vesey and Sutton Trinity have the lowest rates within Birmingham. Aston ward has the highest unemployment rate at 31.0%.

The 5 wards with highest unemployment rate are:

<ul> <li style="margin-left:60px;">Aston - 31.0%</li> <li style="margin-left:60px;">Washwood Heath - 30.4%</li> <li style="margin-left:60px;">Lozells and East Handsworth - 28.3%</li> <li style="margin-left:60px;">Nechells - 27.8%</li> <li style="margin-left:60px;">Sparkbrook- 26.9% </li> </ul>

Education and Skills
Adult Skill Levels

Birmingham has a large pool of highly skilled residents for businesses to draw upon. The 2010 Annual Population Survey shows that there are 168,000 working age Birmingham residents with degree level or higher qualifications.

However Birmingham, like the West Midlands region which it sits within, has a relatively low proportion of its population educated to degree level or higher standard. At approximately 25% of the working age population with high level skills, Birmingham is below the UK average (31%) and ranks towards the bottom of the eight English core cities.



Birmingham has a high proportion of its working age population with no formal qualifications. Birmingham has a higher proportion of its population with no formal qualifications than any of the other English core cities. This proportion with no qualifications is significantly above the average for the West Midlands region and the nation as a whole. This skill shortage is a contributing factor to Birmingham’s low proportion of residents employed, and associated high claimant unemployment rate.

School Performance

GCSE attainment levels in the city have undergone a huge improvement over the past decade. The number of pupils achieving 5 or more GCSEs at A*-C grade has increased from 40.8% in 2000 to 82.0% in 2010. During this period the city’s attainment rates have moved from being well below the national average to surpass the England average in 2007. In 2010 Birmingham’s GCSE attainment rates were 6.6 percentage points above the national rate. If we look at equivalent GCSE attainment rates including English and Maths Birmingham has also demonstrated improvement (although not at the same rate) and, in 2010, surpassed the national rate (54.9% and 53.4% respectively)



Although GSCE results have improved greatly in recent years, and the proportion of 16 year olds gaining 5 or more GSCEs at A*-C grade is now above the national rate, it will take some time for this to significantly influence the overall working age qualification rates. However, if we look at the cohort (20-24 year olds) that would be expected to see the first improvement in qualification levels filtering through from the increase in GCSE attainment rates, the results are encouraging.

Higher Education

Birmingham is home to three internationally renowned universities – the University of Birmingham, Aston University and Birmingham City University, which between them produced 10,100 first-degree graduates and 7,290 post-graduates in 2008.

There are no official figures on graduate retention rates but a study by the Centre for Cities found that In 2006/07 Birmingham had a retention rate of all higher education leavers of 41.8%.

Transport
Infrastructure

<ul> <li style="margin-left:60px;">Centro manages 12 bus stations and over 11,500 passenger stops, stands and shelters. 2,179 shelters are in Birmingham </li> <li style="margin-left:60px;">In 2010/11 129.3 million bus service kms were operated. 54 million kms of this were in Birmingham. </li> <li style="margin-left:60px;">•	The majority of local rail services in the Network West Midlands area are operated by London Midland (part of Govia). However, other franchised train operators (Arriva Trains Wales, Chiltern Railways, CrossCountry Trains, Virgin Trains) also provide rail services within the conurbation and/or linking the West Midlands with the rest of Britain </li> <li style="margin-left:60px;">Together, these train operators provide a total of 1,017 trains into the key rail hub of Birmingham New Streeteach weekday and a further 237 daily services into Birmingham Moor Street and Snow Hill stations. </ul>

Fuel Consumption



<ul> <li style="margin-left:60px;">•	Latest regional road transport consumption statistics show that vehicles in the West Midlands Metropolitan area use approximately 1.13 million tonnes of fuel a year, a slight decrease from the previous year. Cars represent 66% of the total fuel consumption with petrol cars representing the largest share at 47% and 19% for diesel cars. Buses represent 7% and goods vehicles have decreased to 27% from 28% of the total road transport consumption. </li> <li style="margin-left:60px;">In Birmingham Cars represent 68.7% of the total fuel consumption and Buses represent 8% of consumption. Both of these are above national averages. </li> <li style="margin-left:60px;">Statistics for the UK show broadly the same trend as the West Midlands with cars representing 61.1% of total fuel consumption and buses only 5%. </li> </ul>



Fuel Prices

<ul> <li style="margin-left:60px;">Comparing fuel prices in April 2011 with prices in April 2010 shows that there has been an increase in prices per litre for diesel, super and premium unleaded. </li> <li style="margin-left:60px;">Super unleaded has increased by 15.7p, premium unleaded by 14.9p and diesel by 20.1p. </li> </ul>

Rail Patronage

<ul> <li style="margin-left:60px;">The chart shows the number of passenger journeys made annually since 1996. </li> <li style="margin-left:60px;">Rail patronage in the West Midlands has increased by</li> <li style="margin-left:60px;">4.5% during 2010/11 to 41.8 million. In 2009/10 rail patronage was 40 million. </li> <li style="margin-left:60px;">Comparing rail patronage across Passenger Transport Executives (PTE) shows that rail patronage has increased in some of the PTE areas. South Yorkshire had the greatest increase (19%) followed by West Midlands (6.4%) and then the Tyne & Wear (0.6%). </li> <li style="margin-left:60px;">Rail patronage per head of population remains the highest in Merseyside with 2.9 million passenger journeys per 100,000 people, followed by the West Midlands with 1.6 million, Greater Manchester 0.9 million, South Yorkshire 0.6 million and Tyne and Wear just over 160,000 </li> </ul>

Metro Patronage

<ul> <li style="margin-left:60px;">The chart shows the number of passenger journeys made annually since the opening of Line One in 1999. </li> <li style="margin-left:60px;">Metro patronage remains steady at 5 million in 2010/11. </li> </ul>



Bus Passenger Journeys

<ul> <li style="margin-left:60px;">The total number of passenger journeys in 2010/11 was 300.2 million. This includes 1.7 million journeys made on accessible transport. </li> <li style="margin-left:60px;">Concessionary travel in 2010/11 was 96.1 million and non-concessionary travel was 204.1 million. </li> <li style="margin-left:60px;">Comparing bus patronage across Passenger Transport Executives (PTE) shows that bus patronage has decreased in all PTE areas apart from in Tyne and Wear. The largest decreases were seen in West and South Yorkshire (5.3% and 4.2% respectively). </li> <li style="margin-left:60px;">Bus patronage per head of population is the highest in Tyne & Wear with 13 million passenger journeys per 100,000 people followed by the West Midlands with 11.4 million, Merseyside with 10.5 million, Greater Manchester 8.9 million, South Yorkshire with 8.6 million and West Yorkshire with 8.2 million. </li> </ul>

Concessionary Travel Analysis

<ul> <li style="margin-left:60px;">Since July 2005, the blind and disabled pass and senior citizen pass have been changed to the Disabled Concessionary Travel Pass and the Older Person’s Concessionary Travel Pass. The number of total passenger journeys made in 2010/11 under both schemes decreased to 75.1 million from 78.6 million in 2009/10. </li> <li style="margin-left:60px;">Passenger journeys made under the Child and Scholar scheme have increased to 21 million in 2010/11 from 19.1 million in 2009/10. </li> </ul>

Travel Pass Analysis

<ul> <li style="margin-left:60px;">Of the 300.2 million bus journeys made in 2010/11, 96.1 million journeys were made under concessionary travel schemes (older person, disabled, children); this represents 32% of all bus journeys. </li> <li style="margin-left:60px;">Passenger journeys made under the combined Senior Citizen and Blind and Disabled scheme represent 25% of all bus journeys. There are approximately 537,850 free passes (507,949 Senior Citizens & 29,901 Blind and Disabled) on issue under the combined scheme. </li> <li style="margin-left:60px;">The take-up rate of the free Older Persons Concessionary Travel pass is estimated to be 95%. It would appear the take up rate amongst the 60-64 year-olds who came into the free scheme in July 2005 continues to run at a significantly lower level than those 65 or above. It is generally considered that 60-64 year-olds undertake significantly less trips per year than has historically been the case, partly due to many of the new pass holders being economically active and their trips are commercial and not valid under some schemes if going to work in the morning peak. </li> <li style="margin-left:60px;">Child and Scholar peak (to and from school) passenger journeys represent 7% of all bus journeys. </li> </ul>