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Economic Contexts, Outlooks and Considerations

This report provides an overview of the economic context and outlook for Northern Ireland, including historical trends, economic growth rates, employment trends, and sectoral analysis. It also includes a section on the Causeway Coast and Glens District Council contexts.

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Economic Contexts, Outlooks and Considerations

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  1. Economic Contexts, Outlooks and Considerations December 2018 @UlsterUniEPC

  2. Contents • Northern Ireland economic context and outlook • Causeway Coast and Glens District Council contexts • Historical Trends • Economic Outlook • Appendix / Annex • UUEPC forecasts and scenarios • Glossary

  3. NI: Economic Context and Outlook

  4. Output at a record high NI accounts for 2% of total UK GVA, on average Real GVA has increased by £9bn since 2001 with the current level being £36.4bn (2016) This is set to increase to £39.6bn by 2027 While in the upper & lower scenarios real GVA is set to increase to £41.5bn & £38bn by 2027 respectively Real GVA (£bn), NI, 2001-27 And set to continue for the next decade • Source: ONS (Regional Accounts) & UUEPC Autumn 2018 NI Model

  5. Real GVA growth rates (%) Growth over the next decade to be faster compared to the previous decade but still rather subdued Annual growth in NI is expected to average 0.8% over the 2017-27 period Much slower than historical levels (1.1% between 2001-17) But faster than growth between 2006-16 (0.4%) Real GVA growth rates (%), NI, 2001-27 Source: ONS (Regional Accounts) & UUEPC Autumn 2018 NI Model

  6. A mixed picture for NI in terms of employment & productivity growth Manufacturing: A high productivity & growing sector? An advanced manufacturing growth story? Average productivity in 2017 was £41,700 and set to grow on average at 0.6% over the 2017-27 period Manufacturing is a high productive sector (£56,000) in 2017 with productivity forecast to be £60,000 by 2027 The financial sector productivity is forecast to have a productivity of £68,000 by 2027, but an expected employment fall of 5% over the next decade Workplace employment total, productivity & employment growth (%) by sector, NI, 2017-2027 Source: ONS (Regional Accounts), NOMIS (Workforce Jobs) & UUEPC Autumn 2018 NI Model

  7. Employment at a record high And set to continue to increase over the next decade despite difficulties Employment is forecast to increase from 877,000 in 2017 to 898,000 in 2027 The upper scenario forecasts that employment will reach the ambitious level of 935,000 by 2027 The lower scenario forecasts that employment will fall to 866,000 by 2027 Total workplace based employment, NI, 2001-27 • Source: NOMIS (Workforce Jobs) & UUEPC Autumn 2018 NI Model

  8. NI has seen a considerable employment gain over the last 16 years But a high level of net losses in the Manufacturing sector 100,000 net employee jobs were added to the NI economy The private sector was the main driver of employment creation 80% of additional employment 28,000 employee jobs were created in the heath sector 2001-17 The manufacturing sector has suffered the most over this period with a net employment loss of 12,000 – due to more automation Net workplace employment change by sector, NI, 2001-17 • Source: NOMIS (Workforce Jobs) & UUEPC Analysis

  9. Sectoral employment change Highest Net Job Losses in Agriculture & Retail 21,000 net new jobs are forecast to be created by 2027 Strongest growth in Services such as ICT and Professional/Technical but also a recovery in Manufacturing (+4,000 jobs) The Agriculture and Retail sectors are forecast to suffer the most over this period with a net loss of 8,000 jobs between the two Net workplace employment change by sector, NI, 2017-27 • Source: NOMIS (Workforce Jobs) & UUEPC Autumn 2018 NI Model

  10. NI the happiest place in the UK NI is the happiest, most worthwhile & best for life satisfaction as well as place with the lowest anxiety in the UK NI ranks the highest for the number of people of all UK regions for life satisfaction (36.7%), worthwhileness (43.7%) & happiness (41.6%) NI ranks also the highest level of people who have low levels of anxiety (47.1%) Well-being indicators (life satisfaction, worthwhileness, happiness & anxiety), UK regions, 2017-18 • Source: ONS (Well-being survey) & UUEPC Autumn 2018 NI Model • Note: % show the % of people who answered 9-10 (life satisfaction, worthwhile & happiness) & 0-1 (anxiety)

  11. Causeway Coast & Glens: Contexts

  12. Causeway Coast & Glens: Historical Trends

  13. Current employment levels well below peak But there has been a bounce back in last couple of years Employment has increased by over 400 since 2001 with employment in 2017 being almost 52,000 The 2017 levels almost 4,000 below the 2006 peak A 1% increase in workplace based employment in recent years Total workplace employment, Causeway Coast & Glens, 2001-17 Source: NISRA (BRES) & UUEPC Analysis

  14. Causeway Coast & Glens recovery still to take full effect Around 800 jobs created since 2012 Total workplace based employment (net change), Causeway Coast & Glens, 2001-17 CC&G since 2012 has created 800 jobs – over 3,000 less than was lost during the recession The recession did have a big effect on the council with losses totalling 3,900 Growth in last five years has been weak in general but Tourism & Manufacturing have led the way – the first part of an increase over all three time periods Source: NISRA (BRES) & UUEPC Analysis

  15. Real GVA has slowly recovered since the recession Real GVA currently is £2bn (2016) in CC&G Up from £1.9bn in 2001 a gain of almost £100m in the last 15 years In part due to the attraction of more tourists through a thriving tourism industry But growth has dropped off in last year Real GVA (£bn), Causeway Coast & Glens, 2001-16 Source: ONS (Regional Accounts) & UUEPC Analysis

  16. Growth almost on par with pre-recession growth Real GVA CAGR (%), Causeway Coast & Glens, 2001-17 CC&G average real GVA growth since 2001 has been 0.5% per annum CC&G real GVA has slowed since the recession – but growth levels are almost at pre-recession rates! Construction & Manufacturing are leading the way 9.9% & 8.2% per annum since 2012 Source: ONS (Regional Accounts) & UUEPC Analysis

  17. Causeway Coast & Glens one of the best places to live for quality of life! CC&G is the second happiest, most life satisfying, life fulfilling (worthwhileness) place to live in all of NI As well as being the council with the lowest levels of anxiety out of all councils in NI A reflection of the lifestyle? Well-being indicators (life satisfaction, worthwhileness, happiness & anxiety), NI LGDs, 2017-18 • Source: ONS (Well-being survey) & UUEPC Analysis • Note: % show the % of people who answered 9-10 (life satisfaction, worthwhile & happiness) & 0-1 (anxiety)

  18. Causeway Coast & Glens unemployment compared to NI average Claimant unemployment fell to 2.8% in 2017 CC&G’s have the third highest rate out of all 11 councils Claimant rates continue to be above the NI average (2.6%) but less so than in 2009-2012 Unemployment rates should not be regarded as an indication of the ‘real’ levels of unemployment but have to be seen alongside inactivity, etc. Claimant Unemployment rate (% 16-64), Causeway Coast & Glens vs. NI, 2005-17 Unemployment rates are falling but remain above NI average • Source: NISRA & Department of Finance, Economic and Labour Market Statistics • Note: 2013 introduction of universal credit

  19. Causeway Coast & Glens claimant unemployment LGDs comparison CC&G has the third highest claimant unemployment rate at ward level of 10.1% in 2017* Next highest ward in CC&G is #30 and 7 wards have a 5% rate or higher Average claimants within CC&G (2.9%) remain above the NI average (2.6%) Lowest ward in CC&G is just outside the bottom ten wards with 1% rate Variation in % of Claimant Unemployed as proportion of 16+, Council Areas, 2017 Variation across wards but most clustered at lower end • Source: NISRA & Department of Finance, Economic and Labour Market Statistics • * Highest ward: Greystone in Limavady

  20. Causeway Coast & Glens: Enterprise Trends

  21. Mid table performance for enterprise stocks in Northern Ireland NI gain almost 3,700 extra businesses since 2015 380 VAT/PAYE businesses per 10,000 people (2017) in NI Up from 360 in 2015 a gain of almost 3,700 businesses in the last 3 years Total businesses grew by 2.3% from 2016 No. of VAT/PAYE Businesses per 10,000 people, UK Regions, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  22. Enterprise births in NI Evidence of less entrepreneurial drive than the rest of the UK? 37 businesses births per 10,000 people (2017) in NI Up from 29 per 10,000 people in 2015 a gain of just over 1,400 business births in the last 3 years 1.4% average annual increase in business births since 2007 No. of Businesses Births per 10,000 people, UK Regions, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  23. Enterprise deaths in NI lowest of all UK regions Businesses show resilience and leadership 26 businesses deaths per 10,000 people (2017) in NI Up from 22 per 10,000 people in 2015 a loss of just over 800 business in the last 3 years 10 year average see’s NI have the lowest business deaths per 10,000 people in all UK Regions No. of Businesses Deaths per 10,000 people, UK Regions, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  24. Causeway Coast & Glens and enterprise stock 250 business gain since 2015 400 VAT/PAYE businesses per 10,000 people (2017) in CC&G Up from 390 per 10,000 in 2015 a gain of 250 businesses in the last 3 years Total businesses grew by 1.9% from 2016 No. of VAT/PAYE Businesses per 10,000 people, NI LGD’s, 2015-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  25. Causeway Coast & Glens and business births 425new businesses created per year in the past three years 37 businesses births per 10,000 people (2017) in CC&G Up from 25 per 10,000 people in 2015 a gain of almost 1,300 business births in the last 3 years 39% in business births since 2015 Rise up the ranks from 11th in 2015 to 5th in 2017 No. Businesses Births per 10,000 people, NI LGD’s, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  26. Causeway Coast & Glens and business deaths A loss of 300 businesses per year since 2015 23 businesses deaths per 10,000 people (2017) in CC&G Up from 19 per 10,000 people in 2015 a loss of 890 business in the last 3 years The trend of increasing numbers of business deaths seems universal across all LGD’s CC&G is 10th ranked LGD, staying the same as in 2015 No. of Businesses Deaths per 10,000 people, NI LGD’s, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  27. Causeway Coast & Glens and business churn Turnover in business stock just above NI average CC&G 17.3% business churn in 2017 Up from 13.1% in 2016 a 4.2% points rise Business Churn Rate (%), NI LGD’s, 2016-17 Source: IDBR, NISRA, NOMIS & UUEPC Analysis

  28. Causeway Coast & Glens: Economic Outlook

  29. A growing population Total population is forecast to reach around 147,000 by 2027 Total Population is forecast to increase from 144,000 (2017) to 147,000 (2027) – a 2.2% growth This increase is likely to have impact on variety of policies such as; • Housing demand • Demand for services (esp health) • Impact on rates The UUEPC assume that employment creation impacts upon both population & working population through migration trends (i.e. employment loss can cause out-migration of WPOP due to a lack of opportunities) Total resident population, Causeway Coast & Glens, 2001-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  30. CC&G to have a steadily falling working age population Is the ageing population having an impact? Working age population is forecast to fall from 90,000 (2017) to 87,000 (2027) – a 2.9% decrease Due to higher proportions of older age bands in the Council area? Resident working age population, Causeway Coast & Glens, 2001-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  31. Dependency ratio on the up? Due to a more aging population The dependency ratio is forecast to increase from 38% (2017) to 41% (2027) Likely to have significant policy implications, such as; • Pressures on healthcare / local services • Shrinking labour force participation • Impact on domestic rates • Skills matching issues i.e. not matching employer needs Resident dependency ratio (%), Causeway Coast & Glens, 2001-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  32. Output to increase at a steady rate over the next decade But still below peak and not expected to return to peak until 2027 Real GVA is forecast to increase from £2bn (2016) to £2.2bn (2027) As a result of the increase of in productivity from such sectors as ICT and gains in other more traditional sectors Upper scenario forecast real GVA is to be £2.3bn by 2027 Lower scenario forecast real GVA is to be £2.1bn by 2027 Real GVA (£bn), Causeway Coast & Glens, 2001-27 Source: ONS (Regional Accounts) & UUEPC Autumn 2018 Local Model

  33. Output growth to be driven by higher productivity jobs With ICT & Professional Services leading the way Real GVA growth is forecast to be 0.6% per annum between 2017-27 Lower & upper scenarios forecast growth of 0.2% to 1.1% per annum High value adding sectors are forecast to drive growth such as Information & Communications and Professional & Scientific services Real GVA CAGR (%), Causeway Coast & Glens, 2017-27 Source: ONS (Regional Accounts) & UUEPC Autumn 2018 Local Model

  34. Growth to be relatively modest over the next decade With the transition period (2020-21) to be particularly slow CC&G real GVA growth rate for 2016 was -1.1% Forecasted average growth rates of 0.6% (2017-27) Real GVA growth rate (%), Causeway Coast & Glens, 2002-27 Source: ONS (Regional Accounts) & UUEPC Autumn 2018 Local Model

  35. Total resident labour force To steadily increase over the next decade Labour force comprises of the economically active (i.e. employed plus unemployed) Resident labour force is forecast to increase from 58,700 (2017) to 58,800 (2027) – a 0.2% increase The UUEPC assume a proportion of employment in the area is taken by commuters (1/6th) and the remaining is taken by residents (4/6th) Total resident labour force, Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  36. Employment below peak And forecast to remain below peak for next decade Total employment is forecast to be 53,000 in 2027, up from 52,000 in 2017 – a 1.3% increase Upper scenario forecasts total employment to be 55,000 by 2027 Lower scenario forecasts total employment to be 51,000 by 2027 (ie: losses in 2019-2021 not made up) Total workplace based employment, Causeway Coast & Glens, 2001-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  37. Sectoral employment change Accommodation & Construction leading the way CC&G is forecasted to gain around an additional 700 jobs by 2027 The accommodation & construction sectors are forecast to gain around 700 additional jobs by 2027 Agriculture is forecast to lose almost 600 jobs by 2027 – structural change continuing Change in employment, Causeway Coast & Glens, 2017-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  38. Employment growth to range from 1,200 job losses to a 2,800 job gain Employment is forecast to grow in 2 out of the 3 scenarios with growth ranging from 700 to 2,800 new jobs by 2027 Employment is forecast to fall by 1,200 jobs in the lower scenario by 2027 Tourism sector to act as the key driver in the Council area (as in previous two periods) Total workplace based employment (net change), Causeway Coast & Glens, 2017-27 Source: NISRA & UUEPC Autumn 2018 Local Model

  39. Job growth Baseline, Lower & Upper Scenarios Source: NISRA & UUEPC Autumn 2018 Local Model

  40. Resident employment rate (%) The employment rate is forecast to increase slightly over the next decade CC&G employment rates are forecast to fall slightly from 61% (2017) to 64% (2027) It should also be noted that levels of working age migration will impact the employment rate – in a positive fashion Resident employment rate (%), Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  41. Resident ILO unemployment level Unemployment levels are forecast to fall over the next decade Unemployment levels are forecast to decrease from 4,300 (2017) to 3,200 (2027) Sharp falls in 2017 and 2018 with only a slight upward curve thereafter but well below the 2016 numbers Resident ILO unemployment level, Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  42. Resident ILO unemployment rate (%) Unemployment rates to fall and then remain stable over the next decade Unemployment rates show the no. of unemployed as a % of the labour force Unemployment rates are forecast to fall from 7.4% (2017) to 5.4% (2027) Resident ILO unemployment rate (%), Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  43. Resident economic inactivity level Inactivity level is expected fall slightly to over the next decade Numbers in Economic Inactivity is forecast to fall from 31,000 (2017) to 28,000 (2027) – a 8.7% decrease Expected to decrease as the tightness of the labour market and the falling numbers of working age population Resident economic inactivity level, Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  44. With the economic inactivity rate also forecast to fall Economic inactivity rate shows the no. of the economically inactive as a % of the working age population The economic inactivity rate is forecast to fall from 34.4% (2017) to 32.3% (2027) It should also be noted that working age migration will impact the inactivity rate Resident economic inactivity rate (%), Causeway Coast & Glens, 2009-27 Source: LFS (Local Area Database) & UUEPC Autumn 2018 Local Model

  45. Summary

  46. Forecast summary Forecast summary table, Causeway Coast & Glens, 2017-27 • Source: NISRA,NISRA (BRES), LFS (Local Area Database), ONS (Regional Accounts) & UUEPC Local Model Forecasts Autumn 2018 • Note: Resident employment / unemployment / inactivity rate (%) change refer to % point change

  47. NI strengths & challenges: • Source: NISRA,NISRA (BRES), LFS (Local Area Database), ONS (Regional Accounts) & ONS (Well-being)

  48. Local council strengths & challenges: • Source: NISRA,NISRA (BRES), LFS (Local Area Database), ONS (Regional Accounts) & ONS (Well-being)

  49. Local council summary: • Source: NISRA,NISRA (BRES), LFS (Local Area Database), ONS (Regional Accounts) & ONS (Well-being)

  50. Appendix

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