Economy of Birmingham

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Colmore Row in Birmingham's Business District.

The city of Birmingham, in England, is an important manufacturing and engineering centre, employing over 100,000 people in the industry and contributing billions of pounds to the national economy. During 2013, the West Midlands region as a whole created UK exports in goods worth £19.4 billion, around 8.7% of the national total, however exports fell by 14.5% compared to 2012 and there is a trade deficit of £5.6 billion.[1] Output was forecast to grow from 2007 to 2012,[2] but the city's economy flat-lined in from 2007 to 2009, following the economic crisis which affected the economies of countries around the world.[3]

Birmingham was second only to London for the creation of new jobs between 1951 and 1961,[4] and unemployment rarely exceeded 1% between 1948 and 1966.[5] By 1961, household incomes in the West Midlands (county) were 13% above the national average,[6] exceeding even London and the South East.[7] However, the incoming Labour government of 1964 sought to control what it saw as a "threatening situation", most notably by extending the Control of Office Employment Act 1965 to the Birmingham conurbation in 1965. Birmingham's economic landscape had suffered significantly as a result, but since then much of the damage has been undone.[8] The economy of Birmingham also grew relatively slowly between 2002 and 2012, where growth was 31% vs national growth of 44%: the lowest of all the Core Cities.[9] Many of the higher skilled jobs generated have gone to commuters from the surrounding area, and the two parliamentary constituencies with the highest unemployment rates in the UK - Ladywood and Sparkbrook and Small Heath - are both in inner-city Birmingham.[10] According to the 2010 Indices of Multiple Deprivation, Birmingham is the most deprived local authority in England in terms of income and employment. Overall, Birmingham is the 9th most deprived local authority in England when factors such as crime, health and education are included, behind Liverpool and Manchester as the third most deprived Core City.[11] Growth has also placed significant strain on the city's transport infrastructure, with many major roads and the central New Street railway station operating considerably over capacity during peak periods.[citation needed]

Birmingham was also one of the founding cities for the Eurocities group and is also sitting as chair. Birmingham is considered to be a 'Beta-' global city, rated as the third most globally influential city in the UK after London and Manchester.[12] Birmingham has the second-largest city economy in the UK, and was ranked 72nd in the world in 2008.[13]

Economic indices[edit]

Below is a collection of economic indices featuring Birmingham. It is important to remember that while useful, surveys and indicators have limitations, and are at times subjective and incomplete. For example, no complete list of factors affecting quality of life can be created, and the way people weight these factors differs.

Quality of Life[edit]

  • 10th in the UK for quality of life (2013), according to a rating of the UK's 12 largest cities, ahead of Sheffield and Bradford who rank 11th and 12th respectively. The cities were assessed on a range of factors including property market activity, rental costs, salary levels, disposable income growth, cost of living, unemployment rates and life satisfaction.[14]
  • 52nd-most liveable city in the world in 2010, according to the Mercer Index of worldwide standards of living,[15]
  • 19th in the UK amongst big cities for 'cycle-friendliness' (2010).[16]
  • Overall 9th most deprived Local Authority in England according to the 2010 Indices of Deprivation, which takes into account: income; employment; health and disability; education, skills and training; barriers to housing and services; crime; and living environment.[17]
  • Most deprived Local Authority in England in terms of income deprivation.[17]
  • Most deprived Local Authority in England in terms of employment deprivation.[17]

Business[edit]

Cushman & Wakefield European Cities Monitor (2010) - A survey based on the views of 500 European businesses of Europe's leading business cities.[18]

  • Overall 18th in Europe, 3rd in the UK after London and Manchester, best city to locate a business based on factors which are disaggregated below.
  • 9th in Europe, 2nd in the UK after London, for ease of access to markets, customers or clients.
  • 16th in Europe, 3rd in the UK after London and Manchester, for best qualified staff.
  • 15th in Europe, 3rd in the UK after London and Manchester, for quality of telecommunications.
  • 11th in Europe, 3rd in the UK after London and Manchester, for external transport links to other cities and internationally.
  • 5th in Europe, 3rd in the UK after Leeds and Glasgow, in terms of value for money of office space.
  • 15th in Europe, 4th in the UK after Glasgow, Leeds and Manchester, for cost of staff.
  • 4th in Europe, 2nd in the UK after Manchester, for availability of office space.
  • 16th in Europe, 4th in the UK after London, Manchester and Glasgow, for climate governments create for businesses.
  • 11th in Europe, 2nd in the UK after London, in terms of languages spoken.
  • 18th in Europe, 4th in the UK after London, Manchester and Leeds for ease of travelling around within the city.

In the same survey, when asked how well companies know each of the cities as a business location, 28% said they were familiar with Birmingham as a business location. This was the third highest in the UK after London (82%) and Manchester (33%).

GVA[edit]

GVA for Birmingham 2002-2012[19]
Year GVA
(£ million)
Growth (%)
2002 16,117 Increase08.2%
2003 17,069 Increase05.9%
2004 17,532 Increase02.7%
2005 18,281 Increase04.3%
2006 18,538 Increase01.4%
2007 19,806 Increase06.8%
2008 20,198 Increase02.0%
2009 19,824 Decrease01.9%
2010 20,680 Increase04.3%
2011 21,148 Increase02.3%
2012 21,191 Increase00.2%

In 2012, Birmingham's GVA was £21.2bn, accounting for 42.9% of the GVA of the West Midlands (county), 21.5% of the GVA of the West Midlands (region), and 1.5% of the GVA of the UK. Compared with other NUTS 3 city areas, its GVA is exceeded only by London (comprising five NUTS 3 areas - £309.3bn) and Greater Manchester South (£34.8bn).[19]

Total GVA, 2012[19]
Area GVA
(£ million)
GVA growth (%)
2011-12
GVA
(£ per head)
GVA per head growth (%)
2011-12
Birmingham 21,191 Increase00.2% 19,523 Decrease00.8%
West Midlands (county) 49,446 Increase01.7% 17,898 Increase00.9%
Core Cities average1 15,690 Increase02.5% 23,016 Increase01.5%

1excluding Birmingham, included Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield

The apparent fall in GVA per head in 2012 (-0.8%) despite a (weak) increase in total GVA is likely to be due to rising local population figures.

Productivity[edit]

GVA per employee in Birmingham is estimated to be £42,800 in 2012. It is ranked 6th among the major cities and conurbations in the UK, and ranked 3rd among the Core Cities behind London (£75,100), Edinburgh (£54,100), Leeds (£46,900), Greater Manchester South (£46,500) and Glasgow (£44,700).[20]

GVA per employee, 2012[20]
Area GVA
per worker (£)
GVA per worker
% change 2007-12
Birmingham 42,800 Increase09%
Core Cities average2 40,700 Increase010.6%

2excluding Birmingham, included Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield

GVA by sector[edit]

Industry breakdown, 2011[19]
Sector Value
(£ millions)
Growth
2010-11 (%)
% of total
Agriculture, forestry and fishing 6 Increase020.0 0.3
Production 2,659 Increase02.7 12.8
- of which manufacturing 2,048 Increase06.2 9.7
Construction 1,162 Increase03.9 5.5
Distribution; transport; accommodation and food 3,364 Increase08.8 15.9
Information and communication 745 Decrease011.4 3.5
Financial and insurance services 2,461 Decrease07.8 11.6
Real estate activities 2,594 Increase06.5 12.3
Business service activities 2,487 Increase017.1 11.8
Public administration, education and health 5,162 Decrease02.8 24.4
Other services and household activities 507 Increase02.4 2.4
Total 21,148 Increase02.3

Employment, Welfare and Education[edit]

The mid-year estimate for the population of Birmingham was 1,085,400 in 2012 and population growth was estimated to be 1.04%, the 4th highest of the Core Cities after Nottingham (1.59%), Manchester (1.56%) and Newcastle (1.2%).[21]

Employment[edit]

Employment Statistics (Jul 12-Jun 13)[22]
Age 16-64 Birmingham
(%)
West Midlands
(%)
Great Britain
(%)
Economically active 69.9 76.2 77.3
In employment 57.5 69.0 71.1
Unemployed 16.5 9.2 7.8
% of economically active who are self-employed 7.1 8.8 9.5

Earnings[edit]

Earnings by residence1 2013 [23]
Full-time workers Birmingham
(£)
West Midlands
(£)
Great Britain
(£)
Weekly pay (all workers) 478.6 483.0 518.1
Male 514.2 527.8 558.8
Female 423.5 421.5 459.8
Gender pay gap 17.6% 20.1% 17.7%
Hourly pay (all workers) 12.21 12.24 13.18
Male 12.61 12.88 13.80
Female 11.42 11.20 12.27
Gender pay gap 9.4% 13.0% 11.1%

1Median earnings in pounds for employees living in Birmingham

Earnings by workplace2 2013 [24]
Full-time workers Birmingham
(£)
West Midlands
(£)
Great Britain
(£)
Weekly pay (all workers) 518.6 484.6 517.8
Male 568.3 527.0 558.3
Female 453.3 417.1 459.6
Gender pay gap 20.2% 20.9% 17.7%
Hourly pay (All workers) 13.46 12.24 13.17
Male 14.27 12.90 13.80
Female 12.26 11.17 12.27
Gender pay gap 14.1% 13.4% 11.1%

2Median earnings in pounds for employees working in Birmingham.

Education[edit]

General Certificate of Secondary Education (GCSE) 2012 [25]
Birmingham
(%)
England
(%)
Pupils achieving 5+ GCSEs, A*-C 88.1 81.8
Pupils achieving 5+ GCSEs, A*-C with English and Maths 60.1 59.4
Pupils achieving no GCSEs 0.8 0.5
Qualifications 2012 [26]
Level Birmingham
(%)
West Midlands
(%)
Great Britain
(%)
NVQ4 and above 27.6 27.8 34.4
NVQ3 and above 46.9 48.4 55.1
NVQ2 and above 62.9 66.6 71.8
NVQ1 and above 75.5 79.5 84.0
Other qualifications 8.6 6.9 6.3
No qualifications 15.9 13.6 9.7

Business activity[edit]

As the UK economy continues to recover from the downturn experienced in 2008-10, Birmingham has under-performed relative to other Core Cities, where change in business stock was 1.6% compared to 3.6% for the Core Cities average. However, the underlying data showed that Birmingham had high entrepreneurial activity with high levels of business start-ups, but this was offset by a relatively high number of business deaths.[27]

Business Demography, 2012[27]
Area Business Stock % annual change Births % annual change Deaths % annual change 5 year Survival Rates
Birmingham Increase01.6% Increase06.8% 9.3% 39.8%
West Midlands Increase00.9% Increase03.9% 7.7% 40.7%
Core Cities average3 Increase03.6% Increase06.2% 5.6% 40.6%

3excluding Birmingham, included Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield

Jewellery Quarter[edit]

The Jewellery Quarter is the largest concentration of dedicated jewellers in Europe.[citation needed] One third of the jewellery manufactured in the UK is made within one mile of Birmingham city centre.[citation needed] Until 2003, coins for circulation were manufactured in the Jewellery Quarter at the Birmingham Mint, the oldest independent mint in the world, which continues to produce commemorative coins and medals.[citation needed]

From manufacturing to service and research[edit]

As with most of the British economy, manufacturing in Birmingham has declined in importance since the 1970s, and it now employs a minority of the workforce. In recent years Birmingham's economy has diversified into service industries, retailing and tourism, which are now the main employers in the city.[citation needed] There are problems when labour skills do not match available job vacancies. Jobs in the service and tourist sectors are estimated to rise by 50,000 over the next ten years.[citation needed]

Today the city's products include: motor vehicles, vehicle components and accessories, weapons, electrical equipment, plastics, machine tools, chemicals, food, jewellery and glass. Birmingham is home to two major car factories, MG Rover in Longbridge and Jaguar in Castle Bromwich (and Land Rovers are manufactured in neighbouring Solihull).

Retail[edit]

Birmingham is home to one of the largest shopping centres in the UK, the Bullring.[citation needed] It is also the busiest in the UK, attracting 36.5 million visitors in its first year.[citation needed] Birmingham is the most visited retail destination outside London and the retail sector makes up a large proportion of the city's economy.[citation needed]

The city centre currently has four major shopping centres: The Bullring, The Mailbox, The Pavilions and The Pallasades, as well as a number of smaller arcades and precincts and four department stores: Selfridges, Debenhams, House of Fraser and Harvey Nichols; with John Lewis opening its biggest store outside London in the city's New Street station development in 2014.[citation needed]

The city's designer and high end fashion stores are mostly situated in the up-market Mailbox shopping centre, around the Colmore Row financial district, although the Bullring has seen an influx of designer brands such as Hugo Boss, Thomas Sabo, Radley and Armani Exchange.

The city centre also has four markets: The Bullring indoor market, The Birmingham rag market, St Martins outdoor market and the Oasis clothes market.

Tourism[edit]

With major facilities such as the International Convention Centre, the National Exhibition Centre and the Symphony Hall the Birmingham area accounts for 42% of the UK conference and exhibition trade.[28] The city's sporting and cultural venues attract large numbers of visitors.[citation needed]

Research at Birmingham[edit]

Research at the University of Birmingham, both theoretical and practical has contributed to the success of the city and the West Midlands region and had worldwide impact for more than a century. Now the University ranks as high as 10th in the UK according to the QS World University Rankings.[29] Scientific research including research into the controversial nano technology at the University of Birmingham, is expanding in the city and will possibly play a part in the city's economic future.[30]

Banking, insurance and law[edit]

Modern offices at Brindleyplace.

In 2011, Birmingham's financial and insurance services industry was worth £2.46 billion, the 4th largest in the United Kingdom after London, Edinburgh and Manchester.[31] The city also had the fourth largest number of employees in the financial and insurance sector after London, Leeds and Glasgow, with more than 111,500 people employed in banking, finance and insurance, translating to 23% of all employees.[32]

Birmingham has the two largest sets of barrister's chambers in the country; a local law society; 50 major property firms and one of Europe's largest insurance markets. Two of the UK's largest professional service organisations, PwC and Ernst & Young, have established centres in Birmingham's central business district.[33]

The city attracts over 40% of the UK's total conference trade.[34] Two of Britain's "big four" banks were founded in Birmingham: Lloyds Bank (now Lloyds Banking Group) was established in the city in 1765 and The Midland Bank (now HSBC Bank plc) opened in Union Street, in August 1836.

Renewable resources[edit]

Birmingham has a large incineration plant, the Tyseley Energy from Waste Plant which produces electricity for the National Grid through the process of burning waste. It was built in 1996 by Veolia.[35]

Famous brands[edit]

Famous brands from the "city of a thousand trades" include Bird's Custard, Typhoo Tea, the Birmingham Wire Gauge, Brylcreem, Chad Valley Toys, BSA, Bakelite, Cadburys chocolate, HP Sauce, The Elite Performance Sports Company (Epsc) and the MG Rover Group; although no Rover cars are set to be produced in the future, with Nanjing Automobile Group to focus on the MG cars.

See also[edit]

References[edit]

  1. ^ [1]
  2. ^ "Business And Economy". Birmingham Economy. Retrieved 2008-01-08. 
  3. ^ Walker, Jonathan (15 December 2011). "West Midlands economy is flatlining - report". Birmingham Post. Retrieved 2012-02-11. 
  4. ^ Cherry 1994, p. 160
  5. ^ Cherry 1994, p. 159
  6. ^ Sutcliffe & Smith 1974, p. 170
  7. ^ Spencer et al. 1986, p. 23
  8. ^ http://www.economist.com/blogs/blighty/2013/05/birmingham
  9. ^ http://www.leeds.gov.uk/docs/LEH%2004%20Leeds%20Economy.pdf Leeds.gov.uk
  10. ^ "Local area labour markets: statistical indicators - Parliamentary Constituency tables (Unemployment Rate January 2005 to December 2005)" (xls). Office for National Statistics. 
  11. ^ https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6884/1871689.xls
  12. ^ [2], GaWC study
  13. ^ https://www.ukmediacentre.pwc.com/imagelibrary/detail.asp?MediaDetailsID=1562
  14. ^ [3], Opinium Research LLP on behalf of MoneySupermarket
  15. ^ "Quality of Living worldwide city rankings 2010 – Mercer survey". Mercer. 26 May 2010. 
  16. ^ http://www.bikeradar.com/news/article/cycling-cities-league-table-sparks-controversy-25634/
  17. ^ a b c https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/6884/1871689.xls
  18. ^ http://www.europeancitiesmonitor.eu/wp-content/uploads/2010/10/ECM-2010-Full-Version.pdf
  19. ^ a b c d [4], ONS regional GVA accounts 2013
  20. ^ a b [5]
  21. ^ [6], Population change in Core Cities 2011-12, Manchester.gov.uk.
  22. ^ http://www.nomisweb.co.uk/reports/lmp/la/1946157186/report.aspx?town=Birmingham#tabempunemp ONS data - employment & unemployment
  23. ^ |title=Labour Market Profile Birmingham|url=http://www.nomisweb.co.uk/reports/lmp/la/1946157186/report.aspx?town=Birmingham#tabearn
  24. ^ |title=Labour Market Profile Birmingham|url=http://www.nomisweb.co.uk/reports/lmp/la/1946157186/report.aspx?town=Birmingham
  25. ^ |title=Education and skills in your area|url=http://www.education.gov.uk/inyourarea/results/lea_352_wards_3.shtml#03
  26. ^ |title=Labour Market Profile Birmingham|url=http://www.nomisweb.co.uk/reports/lmp/la/1946157186/report.aspx?town=Birmingham#tabquals
  27. ^ a b http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-329345
  28. ^ "NEC Group - Conference City". Locate Birmingham. 
  29. ^ http://www.topuniversities.com/university-rankings/world-university-rankings/2013#sorting=rank+region=+country=+faculty=+stars=false+search=
  30. ^ "Research at Birmingham". University of Birmingham. Retrieved 2008-01-08. 
  31. ^ "Table 3.4, ONS Regional GVA - December 2013". Retrieved 19 December 2013. 
  32. ^ "Birmingham — Employee Jobs - Area Comparison". Nomis - Official Labour Market Statistics. Office for National Statistics. Retrieved 2010-10-10. 
  33. ^ "Business Birmingham - Shared Service Centres and Business Process Outsourcing in Birmingham". 
  34. ^ "NEC Group – Conference City". Locate Birmingham. Retrieved 7 June 2008. 
  35. ^ "Energy Recovery". Veolia Environmental Services. 

External links[edit]