1. Overview of North East Strategic Economic Plan (SEP) and labour market Victoria Sutherland, Senior Economist DurhamWorks LMI Event 20 September 2017

2. North East Strategic Economic Plan (SEP)

3. North East Strategic Economic Plan
North East LEP published refreshed Strategic Economic Plan in March 2017
Overall ambition is to generate ‘more and better jobs’
6 targets to 2024
Increase the number of jobs in the North East economy by 100,000
70% of all jobs created will be better jobs
Reduce the gap in the economic activity rate for people aged with England excluding London by 50%
Close the gap in the employment rate for people aged with England excluding London
Reduce the gap in private sector employment density with England excluding London by 50%
Reduce the gap in GVA per FTE with England excluding London by 50%

4. North East Strategic Economic Plan (cont.)
SEP identifies four areas of opportunity that provide distinctive growth opportunities for the North East
Tech North East – Driving a digital surge
Making the North East’s Future – Automotive and medicines advanced manufacturing
Health Quest North East – Innovation in health and life sciences
Energy North East – Excellence in subsea, offshore and energy technologies
Also identifies three enabling services that support the wider economy and offer opportunities for the delivery of more and better jobs in the North East
Education
Financial, professional and business services (FPBS)
Transport and logistics

5. North East Strategic Economic Plan (cont.)
6 programmes of delivery
Supporting innovation
Business growth and access to finance
Skills
Employability and inclusion
Economic assets and infrastructure
Transport and digital connectivity

6. Labour demand in North East

7. Employment in North East
Using BRES measure
811,000 in employment in North East LEP area
Equivalent to 652 jobs for each 1,000 working age residents
If North East LEP had same employment density as England, would have additional 120,000 jobs
Largest employing sectors in North East LEP area
Human health and social work activities (15.0%)
Wholesale and retail (14.2%)
Education (10.6%)
These are also largest employers at national (England) level
Employment is higher than across England as a whole in
Public administration and defence (6.6% vs. 4.0%)
Manufacturing (11.4% vs. 8.0%)
Human health and social work (15.0% vs. 12.5%)
Education (10.6% vs. 9.0%)
Accommodation and food service activities (7.7% vs. 7.0%)

8. Employment by sector (% of total), 2015

9. Employment in North East (cont.)
Most common occupations in North East LEP area
Professional occupations (17.8%)
Associate professional and technical occupations (12.4%)
Elementary occupations (12.1%)
Skilled trades occupations (11.4%)
Compared to England, North East LEP area overrepresented in
Sales and customer service occupations (9.8% vs. 7.4%)
Process, plant and machine operatives (7.8% vs. 6.4%)
Elementary occupations (12.1% vs. 10.7%)
Skilled trades occupations (11.4% vs. 10.2%)
Compared to England, North East LEP area underrepresented in
Managers, directors and senior officials (8.1% vs. 10.9%)
Associate professional and technical occupations (12.4% vs. 14.6%)
Professional occupations (17.8% vs. 20.4%)

10. Employment by occupation (% of total), 2015

11. Employment projections
UK Commission for Employment and Skills forecasts future labour requirements
Most recent projections published in 2016 for period
Employment projections by sector
Decrease in manufacturing employment
Increase in services employment
Employment projections by occupation
Declines in operative, administrative and secretarial and skilled trades
Largest increases in managers, professionals and associate professional and technical
… but most job openings will relate to replacement demand
… and policy interventions (like those outlined in SEP) can lead to different outcomes

12. Annual average percentage employment change by sector, 2014-2024

13. Annual average percentage employment change by occupation, 2014-2024

14. Job openings by occupation (000s), North East, 2014-2024

15. Labour supply in North East

16. Labour market participation
76.1% of working age population in North East LEP area were economically active in 2016
70.9% were in employment
6.8% were unemployed
Remaining 23.9% were economically inactive
North East LEP area underperforms England as a whole with
Lower economic activity and employment rates
Higher unemployment and economic inactivity rates
Economic activity and employment rates increase with age – peaking amongst age band
Gap in performance between North East LEP and England is particularly large in population
Unemployment rates decrease with age

17. Skills and qualifications
Compared to England as a whole, North East LEP working age population are
More likely to have no or low or intermediate level skills
Less likely to have higher level qualifications
North East LEP employers tend to have fewer staff qualified to Level 4 or above

18. Highest qualifications (% of those in age band), NVQ levels, 16-64 population, 2016

19. Commuting patterns across North East
North East LEP area is relatively self-contained labour market
Majority of residents work in area
Majority of jobs in area taken by residents
Between 41% and 58% of residents work in local authority area where they are resident
Majority of rest are employed in one of the other local authority areas within North East LEP area
Main exception is County Durham – with 7.7% of residents working in Tees Valley
Between 42% and 78% of jobs in each local authority area are filled by residents of that area

20. County Durham labour market

21. County Durham labour market
Broadly similar to North East LEP or North East as a whole
Fewer jobs
Employment in County Durham was 176,000
Equivalent to 537 jobs per 1,000 working age population
Key sectors in County Durham are same as those across North East LEP area (although in different order)
Wholesale and retail (14.9% of employment)
Manufacturing (14.4%)
Human health and social work (14.2%)
Education (13.1%)
County Durham has similar qualifications profile to NELEP

22. County Durham labour market (cont.)
56% of County Durham residents work in County Durham
16% work from home, no fixed work place or offshore
7% work in Sunderland
5% work in Gateshead
4% work in Newcastle
4% work in Darlington
78% of jobs in County Durham are taken by County Durham residents
6% taken by Sunderland residents

23. Thank you