Bristol faces the storm
Author: Malcolm CooperDate: 10/02/2009
Over a decade until summer ‘08, Bristol contributed fully to Britain's urban renaissance which saw cities lead wider growth in the national economy. Bristol's population grew by 0.7 percent a year, the strongest performance among the UK's largest cities, while by early 2008, the employment rate stood at 78.2%, second only to that of Edinburgh among major UK cities.
British cities are now facing significant job losses, and Bristol will have its share. Forecasts prepared for us by Oxford Economics suggest potential job losses up to 2011 of between 7,500 and 20,600, with the actual figure likely to be closer to the latter rather than the former.
So, where is Bristol most vulnerable? The two big candidates are the High Street and the financial services sector. The retail and leisure sector accounts for 18.6 percent of Bristol's jobs. This is actually slightly below the UK average, but Bristol will suffer from the wave of redundancies and store closures now sweeping the country.
The picture is worse in financial and related business services. Here the sector accounts for 20.7 percent of city employment, some five percentage points above the national average. Financial services are Bristol's real Achilles' Heal.
Bristol, however, has three particular strengths.
The first is its geographical position. I do not subscribe to the view that the South will be the hardest hit region of the country. Job Seekers Allowance (JSA) data released in December shows that unemployment is rising most rapidly in the Midlands and the North. While London, the centre of the South East economy is expected to suffer badly, Bristol is not heavily dependent on the capital.
The second source of strength is the diversity of the Bristol economy. Only 4.9 percent of jobs are in the battered construction sector, while no less than 26.8 percent are in the public sector. The public sector is not quite the safe haven that it has been in the past, but there is no reason to fear a large wave of job cuts in this sector.
Finally, Bristol has one unique and undoubted asset - its manufacturing sector. Although this is relatively small (9 percent) in employment terms, it is high value-added, highly efficient, and strongly export oriented. At its heart lies a national aerospace and defence industries cluster with a world-wide reach and a strong order book. While some contracts are being delayed, employment in these businesses should remain stable but smaller, more vulnerable ‘supply chain' businesses that provide components for larger players should be monitored - and supported. There is no scope for complacency during the tough times ahead.
