RSA Forecasts 2016-24

1. RSA Forecasts 2016-24 Tayside comprising Angus, Dundee and Perth and Kinross Evidence Base Team

2. Contents • Note on Oxford Economics Key Sector definitions • Explanation of Thermometer Chart • 1. Summary Indicators Gross Value Added (GVA), 2016-2024 Gross Value Added (GVA), Scotland comparison, 2016-2024 GVA by Industrial Sector, 2016 and 2024 GVA by Industrial Sector, change 2016 and 2024 GVA by Key Sector, 2016 and 2024 GVA by Key Sector, change 2016 and 2024 Productivity (GVA per job) Total Employment (jobs and people), 2016-2024 Total Employment (jobs and people), Scotland comparison, 2016-2024 Total Employment (jobs), gender and status, 2016-2024

3. 2. Employment by Sector Total Employment by industrial sector, 2016 and 2024 Total Employment by industrial sector, change 2016 and 2024 Top 20 industries (SIC 2) by employment, 2016 and 2024 Top 20 industries (SIC 2) by employment, change 2016 and 2024 Total Employment by key sector, 2016 and 2024 Total Employment by key sector, change 2016 and 2024 • 3. Employment by Occupation Total employment by occupation, 2016 and 2024 Total employment by occupation, change 2016 and 2024 Total employment by occupation (SIC 2), 2016 and 2024 Total employment by occupation (SIC 2), change 2016 and 2024 Total requirement by occupation, 2016 and 2024 Total requirement by occupation, change 2016 and 2024 Total requirement (2024): expansion and replacement demand Total requirement by occupation (SOC 2 digit), 2016 and 2024

4. 3. Employment by Occupation (cont’d) Total requirement by occupation (SOC 2 digit), 2016 and 2024 Total requirement by occupation (SOC 2 digit), change 2016 and 2024 Total requirement by occupation (SOC 2 digit), 2024 : expansion and replacement Demand: • 4. Employment by Qualification Total employment by qualification, 2016 and 2024 Total employment by qualification, change 2016 and 2024 Total employment by qualification (2024), expansion and replacement demand Appendix: Oxford Economics Key Sector Definitions

5. Oxford Economics classifies both Growth and Key Sectors as Key Sectors. Some of these Key Sectors are defined differently however to the Scottish Government Growth Sector and Skills Investment Plan definitions. The tables below highlight where this is so and the Appendix gives full details of how each key sector is defined by Oxford Economics . Note on Oxford Economics definitions

6. Oxford Economics classifies both Growth and Key Sectors as Key Sectors. Some of these Key Sectors are defined differently however to the Scottish Government Growth Sector and Skills Investment Plan definitions. The tables below highlight where this is so and the Appendix gives full details of how each key sector is defined by Oxford Economics. Note on Oxford Economics Key Sector definitions Comparison of Oxford Economics and Scottish Government Definitions of Growth Sectors Comparison of Oxford Economics and Skills Investment Plan (SIP) Definitions of Key Sectors Notes: 1. Oxford Economics have created a definition of the Creative Industries based on the UK Government Department for Culture, Media and Sport (DCMS) and therefore is different to the Scottish Government Growth Sector definition: the latter has used 59 SIC codes to define the Scottish Creative & Cultural Industries sector whereas Oxford Economics defines Creative industries and ICT/Digital separately, using 20 and 23 SIC codes respectively. 2. Although the Oxford Economics Key Sector Business Services definition is the same as the Business Services section of the Scottish Government’s Financial & Business Services, the Oxford Economics definition of Financial Services is more detailed (see Appendix for more detail).

7. Explanation of thermometer/bullet chart Although most people are familiar with a grouped bar chart:... • ... a thermometer (or bullet) chart shows both bars in one, enabling more space to be used, which is more practical when dealing with more cluttered charts, showing 2 digit SIC and SOC for example. • The 2016 figures are the ‘thermometer’ and the 2024 figures act as the ‘mercury’. This enables a comparison to be made as to whether there has been a rise or fall compared with the 2016 baseline. And example is given below: 2024 figures less than 2016 2016 figure 2016 2024 figure 2024 figuresmore than 2016 2024 • The actual change in the numbers between 2016 and 2024 is shown throughout on a separate slide. Large relative increases or decreases seen in isolation might not seem as relevant from an industry or occupation with an already high base (for example, with already high levels of employment). Having both charts facilitates this interpretation.

8. 1. Summary Indicators

9. Gross Value Added is defined as the value of goods and services produced in an area. GVA in Tayside is projected to increase from a level of £8,404 million in 2016, to £9,492 million in 2024, a rise of £1,088 million. Gross Value Added (GVA), 2016-2024 £million, constant 2013 prices

10. The output of £9,492 million produced by Tayside in 2024 is expected to rank sixth largest among the RSA regions. Tayside sits just above the West Region, which ranks mid-table in terms of output. The region’s GVA output is forecast to account for 7% of the total across Scotland. Gross Value Added (GVA), Regional Comparison 2024 £million, constant 2013 prices

11. GVA growth in Tayside over the historic period 2000-2016 lagged behind Scotland. Looking over the outlook period to 2024, Tayside’s growth is expected to be below the national average - the region’s GVA is forecast to rise by 13% on top of 2016 levels, whereas Scotland is expected to grow by 15% over the outlook. Gross Value Added (GVA), Scotland comparison, 2016-2024 Index, 2000 = 100

12. In Tayside, Wholesale and retail makes the largest contribution to GVA in 2016 with an output of £1,022 million. The sector is forecast remain the largest contributor to output in 2024, with an output of £1,192 million. Human health and social care (£1,093 million), Manufacturing (£1,001 million) and Real estate (£996 million) are also forecast to make large contributions to output in 2024. All sectors are projected to increase from 2016 to 2024, with the exception of Public administration and defence. GVA by Industrial Sector, 2016 and 2024 £million, constant 2013 prices Note: Figures for all thermometer charts given for 2024 levels only; and sorted high to low according to 2024 figures

13. Tayside is forecast to experience the greatest change in GVA between 2016 and 2024 in the Wholesale and retail trade sector, with an increase in GVA of £170 million projected; followed closely by Real estate, which is expected to grow by £150 million by 2024. The Professional, scientific and technical and Human health and social work sectors are also forecast to experience notable increases. The only sector expected to produce lower levels of GVA is the Public administration and defence sector, producing £30 million less GVA in 2024. GVA by Industrial Sector, change 2016 and 2024 £million, constant 2013 prices

14. In terms of the Key sectors, Health and social care and Construction are forecast to make the largest contributions to output in Tayside in both 2016 and 2024, rising to levels of £1,093 million and £836 million. All Key sectors are projected to increase from 2016 to 2024. GVA by Key Sector, 2016 and 2024 £million, constant 2013 prices * of which, Child day-care activities (SIC 88.91) = £24.2 million (2016); £27.2 million (2024) N.B. See Appendix for the Oxford Economic definitions of Key Sectors and where they deviate from the Scottish Government and Skills Investment Plan definitions.

15. GVA is forecast to increase across all Key sectors in Tayside between 2016 and 2024. Construction is forecast to see the largest projected increase in Tayside between 2016 and 2024, with a rise of £111 million. Health and social care (£110 million) and Business services (£93 million) are also forecast to show large increases in GVA between 2016 and 2024. All Key sectors are expected to grow over the outlook period. GVA by Key Sector, change 2016 and 2024 £million, constant 2013 prices * of which, Child day-care activities = £3.0 million (2016 and 2024) N.B. See Appendix for the Oxford Economic definitions of Key Sectors and where they deviate from the Scottish Government and Skills Investment Plan definitions.

16. Tayside’s productivity has been lower than the Scottish average over the historic period 2000-2016. The productivity of Tayside is expected to rise from £41,100 per job in 2016, to £46,200 per job in 2024. Despite this increase, the productivity gap with Scotland as a whole is forecast to widen over the period to 2024. Productivity (GVA per job) £000s, constant 2013 prices GVA = GVA per job; workplace based.

17. Productivity can be measured as the ratio of regional GVA to the number of jobs in the region. In other words, how much GVA is created per job. In 2024, Tayside is projected have the sixth lowest productivity of the RSA regions (£46,200 per job), just below West Region which sits in the middle of the rankings with a productivity of £46,700 per job. In 2024, a job in Tayside is expected to be £3,500 less productive than the Scottish average and £12,200 less productive than a job in Aberdeen City & Shire (the most productive region). Productivity (GVA per job), 2024: Regional Comparison Scotland (2024) = 49.7 £000s, constant 2013 prices Note: GVA = GVA per job; workplace based.. For further information on productivity at a regional level, see: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/subregionalproductivity/march2016

18. Total employment can be measured in terms of numbers of jobs or numbers of people. Strictly speaking, the concept of employment (measured as the number of people in work) differs from the concept of jobs, since a person can have more than one job, and some jobs may be shared by more than one person1. Jobs based total employment is forecast to remain broadly stable over the outlook period, reaching a level of 205,300 jobs by 2024. Total employment (people) is estimated to number 190,300 in 2016. This is also expected to remain relatively unchanged in the years ahead, declining marginally to a level of 190,000 people in 2024. Total Employment (jobs and people), 2016-2024 ‘000s 1. See for example: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/reconciliationofestimatesofjobs/latest

19. Total Employment (jobs and people) Scotland comparison 2016-2024 • Since 2000, total employment (jobs) growth in Tayside has lagged behind Scotland, this trend is expected to continue over the period ahead to 2024. People based total employment has also been weaker in Tayside than Scotland since 2000. This trend is expected to continue between 2016-2024, with Scottish growth narrowly outpacing Tayside. Total Employment (jobs), 2016-2024 Total Employment (people), 2016-2024 Index, 2000 = 100

20. The majority of males in 2016 work full-time (87,100) with 18,500 working part-time. Between 2016 and 2024, this gap is expected to contract modestly as the number of males working full-time falls to 85,100 and those working part-time remain broadly unchanged. In 2016, females workers were more evenly split, with 52% employed full-time and 48% part-time. The number of females working full-time in 2024 is projected to rise to 53,900 workers, while those working part-time will increase to 19,000 females. The gender employment gap is forecast to contract marginally over the forecast period, with the share of male employment falling from 52% in 2016 to 51% in 2024. Total Employment (jobs), gender and status, 2016-2024 ‘000s

21. 2. Employment by sector

22. Wholesale and retail and Human health and social work are the two main industrial sectors underpinning employment in 2016, providing 33,700 and 32,400 jobs respectively. Both sectors are forecast to remain broadly stable over the outlook period to 2024, with Wholesale and retail unchanged at 33,700 jobs and Human health and social work rising marginally to 32,700 jobs. The performance across sectors in Tayside is quite mixed over the outlook period to 2024. Total employment (jobs) by industrial sector, 2016 and 2024 ‘000s

23. The performance of industrial sectors in Tayside between 2016 and 2024 is shown below. The largest changes in total employment are forecast in the Manufacturing and Public administration and defence sectors, with anticipated losses of 1,200 jobs in both sectors by 2024. The largest increase in total employment is forecast in Administrative and support services, a rise of 1,100 jobs by 2024. The Construction (900 jobs) and Professional, scientific and technical (800 jobs) sectors are also forecast to experience relatively large increases in employment between 2016 and 2024. Total employment (jobs) by industrial sector, change 2016-2024 ‘000s

24. Breaking industrial sectors down from SIC 1 digit (see previous slide) into SIC 2 digit results in 85 sub sectors. The Top 20 sub sectors in terms of levels in 2024 are detailed . At a SIC 2 digit level, Retail trade (22,800 jobs) and Human health activities (19,900 jobs) are forecast to be the largest subsectors in 2024. Education is also expected to provide a large share of jobs in Tayside in 2024. However, note that Education is identical at 1 and 2 digit SIC level and therefore has the same job levels as in Slide 22. The sector would need to be disaggregated to the 3 digit level to break down its six sub sectors1. Top 20 industries by employment (jobs, SIC 2 digit), 2016 and 2024 ‘000s 1. See: https://www.ons.gov.uk/methodology/classificationsandstandards/ukstandardindustrialclassificationofeconomicactivities/uksic2007

25. The largest change at the SIC 2 digit level is expected in Public administration and defence, with the shedding of 1,200 jobs between 2016 and 2024. Although, as detailed on the previous slide, that Education is identical at SIC 1 and 2 digit levels, so too is Public administration and defence, thus these losses are equivalent to those shown seen on Slide 23. Modest increases are expected across a small majority of SIC 2 subsectors in Tayside, the largest of which being a rise of 500 jobs in Specialised construction activities over the forecast. Top 20 industries by employment (jobs, SIC 2 digit), change 2016 and 2024 ‘000s

26. Health and social care is projected to be the largest Key Sector in Tayside in 2016 (32,400 jobs) and again in 2024 after a marginal increase to 32,700 jobs. Tourism and Construction are also forecast to provide a large number of jobs in 2024, with total employment in Tourism accounting for 18,200 jobs in Tayside and Construction expected to provide 18,000 jobs. Total employment (jobs) by key sector, 2016 and 2024 ‘000s

27. It is expected that the performance of Key sectors will be mixed over the outlook period, this confirms the mixed performance across industrial sectors on Slide 23. Overall, the changes between 2016 and 2024 across the Key sectors are expected to be modest. Food and drink is forecast to experience the largest change in total employment, but even this is a small decline of 400 jobs. Total employment (jobs) by key sector, change 2016 and 2024 ‘000s

28. 3. Employment by occupation

29. In this section, we break down employment1 by occupational category. Tayside has quite a broad-based occupational structure in 2016 and 2024. Professional occupations is expected to be the most concentrated occupation in 2024, employing 35,500 people. Tayside is also projected to have high numbers of workers in Associate professional & technical occupations (26,000 people), Elementary occupations (24,000 people) and Skilled trades occupations (23,400 people). Total employment (people)1 by occupation, 2016 and 2024 ‘000s • 1. Note that in this section, following the Oxford Economic forecast data, we look at employment as measured by the number of people in work as opposed to numbers of jobs as per the previous section.

30. The change in the levels of occupational categories between 2016 and 2024 in Tayside are shown below. The performance of occupational categories, like employment sectors, is mixed. The Administrative & secretarial occupations is forecast to contract by 400 people by 2024 relative to the 2016 baseline. This is in part a reflection of the job losses in Public administration & defence (see slides 23 & 25). Process, plant and machine operatives are also forecast to fall, shedding by 300 workers, in part reflecting the fall in the Manufacturing sector. Modest increases are forecast in Caring, leisure and other services (in part reflecting the rise in Human health and social work), rising by 300 people in the period to 2024. Relatively speaking these changes are small compared to the number of people working in each occupation in Tayside and should not alter the overall occupational structure. Total employment (people) by occupation, change 2016 and 2024 ‘000s

31. As the Standard Occupational Classification categorises occupations on the basis of their skills level and content, we can group the nine categories into three: higher, intermediate and lower skilled jobs. The first category is often seen as a proxy for graduate jobs (see note below). Relative to the other regions, Tayside shows a more even distribution across the different tiers of the labour market. In terms of employment (people) levels forecast for 2024 (see Slide 29 previous), 76,200 people are projected to work in ‘Graduate’ jobs (SOC 1-3); 89,800 in intermediate roles (SOC 4-8); and 24,000 at the lower end of the labour market (SOC 9). Top, Middle and Bottom of Labour market, 2024 Middle (SOC 4-7) ‘Graduate’1 jobs (SOC 1-3) Bottom (SOC 9) Notes: 1. See Scottish Government Definitions section: http://www.gov.scot/About/Performance/scotPerforms/TechNotes/graduates 2. Graduate (Managers, directors and senior officials; Professional occupations; Associate professional and technical), Middle (Administrative & Secretarial; Skilled Trades; Caring, leisure & other service occs; Sales & customer service occs; Process, plant & machine ops); Bottom (Elementary occs) 3. Numerator = total regional employment by occupation (people); Denominator = total regional employment (people) 4. Total projected people in employment (2024) in Tayside: 190,000

32. Breaking the Standard Occupational Classification down further into 2 digit SOC we find that employment tends to be more highly concentrated towards the middle and lower tiers of the labour market. Elementary occupations: Clerical and Service is projected to be the largest occupation in 2024, employing 19,700 people in Tayside. Caring and Personal Service and Administrative occupations are the next largest, trailing somewhat with levels of 14,000 and 13,000 people respectively. Total employment (people) by occupation (2 digit SOC), 2016 and 2024 ‘000s

33. The occupational structure in Tayside is expected to remain fairly static over the outlook period to 2024, as the forecasted changes are small relative to the size of occupations. The performance of occupations is mixed between 2016 and 2024, such that the net impact on total employment is marginal and it remains broadly unchanged over the period. Total employment (people) by occupation (2 digit SOC), change 2016 and 2024 ‘000s

34. We now move from total employment to total requirement; that is, instead of overall numbers employed, we look at the numbers of positions that are forecast to open up, mainly due to people retiring but also net migration and movement into other occupations (replacement demand) as well as those that open up due to new, additional positions being created (expansion demand). Replacement demand is forecast to underpin total requirement in Tayside over the outlook period between 2016-2024. Over the years ahead to 2024, replacement demand is forecast to fall from 9,500 positions in 2016 to a level of 7,200 positions in 2024. Expansion demand tends to move in the opposite direction to replacement demand between 2016 and 2024. Expansion demand is expected to contribute only a minor share to total requirement, and is forecast to fall from a level of 900 positions in 2016 to 400 positions in 2024. Aggregated together, total requirement falls over the forecast period from a level of 10,500 in 2016 to 7,600 opportunities in 2024, a net loss of 2,800. Total requirement (people), 2016-2024 ‘000s

35. Breaking the total requirement in the previous slide down by occupational category, we find that most positions in 2016 are in Professional occupations (2,100 positions) and Elementary occupations (1,900 positions). For Tayside, Professional occupations (1,800 positions) and Elementary occupations (1,700 positions) are expected to continue to underpin total requirement in 2024. Between 2016 and 2024, total requirement is forecast to fall across all occupations. Total requirement (people) by occupation, 2016 and 2024 ‘000s

36. Total requirement is forecast to fall across all occupations and unlike total employment (which is much larger for each occupation) these changes over the outlook period can be quite large relative to the occupation’s 2016 total requirement level. Process, plant & machine operatives (55%), Managers, directors & senior officials (47%), Caring, leisure & other service occupations (44%) and Skilled trades occupations (41%) are projected to suffer the most severe contractions in total requirement in 2024, relative to their 2016 levels. Total requirement (people) by occupation, change 2016 and 2024 ‘000s

37. All occupations in Tayside are forecast to experience some level of expansion demand in 2024 with the exception of Process, plant & machine operatives. However, expansion demand is small relative to the level of total requirement for each occupation. The occupations with the largest total requirement in 2024, Professional occupations (1,800 positions) and Elementary occupations (1,700 positions), noted on slide 35, are both principally driven by replacement demand with only minor levels of expansion demand. This trend is shared across occupations, with replacement demand being the main driver of total requirement across all occupational categories in 2024. Total Requirement (2024): expansion and replacement demand ‘000s (people) Data labels show Total Requirement only

38. Breaking down total requirement in Tayside to the 2 digit SOC level confirms the importance of Elementary occupations to the region in 2016 and 2024. Elementary occupations: Clerical and Services has the most positions in 2016 (1,400) with the requirement for openings remaining broadly unchanged by 2024. Sales Occupations and Teaching and Research Professionals are expected to have the next highest total requirement in 2024, with 800 and 700 positions respectively. Total requirement (people) by occupation (2 digit SOC), 2016 and 2024 ‘000s

39. Lower levels of total requirement are expected across the majority of occupations over the period 2016 to 2024, with the losses being quite broadly balanced. As noted in Slide 36, these changes can be quite large relative to the occupation’s 2016 total requirement level. Looking at total requirement as a whole, it is forecast to contract by 27% between 2016 and 2024. Some occupations are expected to benefit from increased positions in 2024, though the levels of increase are marginal. Total requirement (people) by occupation (2 digit SOC), change 2016 and 2024 ‘000s

40. As seen at the SOC 1 digit level (Slide 37), total requirement in 2024 is predominantly driven by replacement demand at the 2 digit SOC level. A number of occupations are forecast to experience very marginal negative expansion demand in 2024, but they are expected to have a positive total requirement when replacement demand is taken into account. Caring Personal Service Occupations and Skilled Construction and Building Trades are forecast to have the greatest level of expansion demand, but even these will be marginal. Elementary occupations: Clerical and Services and Sales Occupations are projected to have the highest total requirement in 2024 and these occupations are forecast to be primarily driven by replacement demand. Total requirement in Tayside is forecast to be derived from replacing exits from existing occupations rather new opportunities created. Total requirement (2 digit SOC), 2024: expansion and replacement demand ‘000s (people) Data labels show Total Requirement only

41. 4. Employment by qualifications

42. In Tayside, the largest share of employment in 2016 is taken by those qualified to a level SCQF 5 & 6, with 67,900 workers and 36% of people in work. This share is forecast to marginally decline over the outlook period to 35% and 66,100 people, allowing those qualified to levels SCQF 7-10 to become the largest portion of the workforce, with 69,800 people and a 37% share of employment. This in part reflects the high proportion of workers in Professional Occupations on Slide 35. Those with the highest levels (SCQF 11-12) and no qualifications make up the smallest shares of employment in 2016 and 2024. Total employment (people) by qualification, 2016 and 2024 ‘000s

43. The demand for those with higher levels of qualifications is forecast to rise between 2016 and 2024, whilst those with middle to low levels of qualifications is expected to contract. An increase in total employment by 2,600 people qualified to levels SCQF 7-10 and 1,000 people qualified to SCQF 11-12 levels is forecast between 2016 and 2024. These rises in total employment represents respective increases of 4% and 6% on top of 2016 levels. Those qualified to levels SCQF 1-4 and 6 are forecast to experience the largest contractions between 2016 and 2024, falling by 1,400 and 1,300 people respectively. Total employment (people) by qualification, change 2016 and 2024 ‘000s

44. In Tayside, when we break down total requirement in 2024 into its components of expansion and replacement demand, it follows the pattern within occupations (see Slide 37). Replacement demand is the principal driver of opportunities across all SCQF levels. Expansion demand is expected to lead to a fall in workers for those with middle to lower level qualifications, most notably those qualified to SCQF level 1-4 (1,400 people) and SCQF 6 (1,300 people). Replacement demand for middle to lower qualifications will be large enough such that the net total requirement will be positive. Modest levels of expansion demand are forecast for workers qualified to SCQF 7-10 (3,200 positions) and SCQF 11-12 (1,200 positions). When aggregating expansion demand with replacement demand it is forecast that 36,400 positions will require people that are qualified to SCQF 7-10 level, representing 48% of all opportunities in 2024. Total requirement (people) by qualification (2024): expansion and replacement demand ‘000s Data labels show Total Requirement only

45. Appendix

46. As stated in the introductory slide, Note on Oxford Economic Key Sector definitions, some of the Oxford Economic definitions of the Growth and Key Sectors differ from the Scottish Government definitions and this should be borne in mind when interpreting the figures. The actual definitions Oxford Economics have used are detailed below: Appendix: Oxford Economics Key Sector Definitions 1. Business Services

47. Appendix: Oxford Economics Key Sector Definitions (cont’d) 2. Chemical Sciences

48. Appendix: Oxford Economics Key Sector Definitions (cont’d) 3. Creative Industries

49. Appendix: Oxford Economics Key Sector Definitions (cont’d) 4. Construction

50. Appendix: Oxford Economics Key Sector Definitions (cont’d) 4. Construction (cont’d)