North West employment at its highest as region Powers Up

Sean Beech, Head of Clients & Industries in the North West at Deloitte

Employment rate in the North West is at its highest since records began, according to Deloitte’s latest Power Up report, but the region must invest in key growth drivers to increase slowed productivity.

Deloitte’s Power Up report offers a review of productivity across UK regions and nations, examining the challenges and opportunities facing these locations. The firm consulted more than 50 business leaders, educators, local government officials and other influential figures to offer insight to how the North West could unlock its potential.

The report found that the employment rate among 16 to 64-year-olds between July and September 2018 was 75%, representing the highest figure since records began in 1992. Unemployment was 4%, close to a record low, and down from 9.5% in 2012.

Sean Beech, Head of Clients & Industries in the North West at Deloitte, said: “Over the past two decades, North West cities have become a model for reviving an urban economy, which has translated to increases in job creation and prosperity. This is in part due to the emergence of key sectors such as information and communications, which have demonstrated that it is possible to increase productivity and employment in tandem.”

However, the report also highlights that, as elsewhere in the UK, the North West has seen slower productivity growth since the financial crisis.

“If productivity growth had continued at the pre‐crisis rate, the average worker could have been working eight and a half hours less per week to produce the same amount”, added Beech. “However, for nine of 13 sectors analysed in the Deloitte report, productivity growth has outperformed national averages since 1997 – giving us hope that the challenge can be addressed.”

Deloitte’s report cites key growth drivers as having the potential to unlock productivity in the North West. This includes strengthening transport systems and investment in skills. Beech explained: “Investment in infrastructure is happening, such as the £1bn expansion of Manchester Airport, however it remains a concern as to whether promises to build Northern Powerhouse Rail and a new route linking northern cities will materialise.”

Professor Dame Nancy Rothwell, President and Vice‐Chancellor of the University of Manchester, said: “We need to do better at automation and much better on skills – particularly at lower levels – and skills in digital/numeracy,” while Chris Oglesby, Chief Executive of Bruntwood, agreed that: “We need to upskill people for the high skilled jobs that we are creating and to better link people to the high skilled jobs being created in the economic engines of the North.”

Partnerships between neighbouring local authorities and the private sector are also cited by Deloitte as central to the region’s economic prosperity. This is notably in Greater Manchester, where joint working has yielded benefits such as the expanding Metrolink tram system, and in Liverpool with Liverpool One and Liverpool Two.

The introduction of new mayors of Liverpool City Region and Greater Manchester also represent a factor in the region’s long-term growth. Beech added: “New powers over transport, housing, strategic planning and adult skills will be key to delivering our cities’ ambitions.

“North West leaders must continue to make common cause with their counterparts across the North to maintain pressure for more investment. If efforts to improve business growth, jobs, skills, transport and digital connections can be aligned, there is no reason why the North West cannot prosper as part of a healthy and more balanced UK economy.”