Employment in East Lancashire

Introduction

East Lancashire, with a population of 521,000 or 37% of the Lancashire total, comprises the five local county districts of Burnley, Hyndburn, Pendle, Ribble Valley and Rossendale together with Blackburn with Darwen unitary authority. With a total resident workforce of nearly 233,000, it is a reasonably self-contained area of small and medium-sized towns which share a common industrial heritage and which is characterised by a high degree of economic cohesion. The sub-region has a strong industrial tradition, which can be traced back to the very beginnings of the industrial revolution and is an area that continues to experience considerable structural change.

Long-Term Employment Patterns

East Lancashire was one of the earliest areas in the UK to experience large-scale urbanisation and factory industrialisation. Throughout much of the 19th century the sub-region's population and labour force rose at rates well above the national average and was associated particularly with the growth of the cotton trade (especially weaving). Growth rates of many towns were quite phenomenal by modern-day standards. For example, from a small settlement of just 3,300 people in 1801, Burnley by 1911 had grown to a large town of more than 106,000 people - a pattern repeated across much of the sub-region.

The area reached the peak of its economic power just before World War I when it had roughly 600,000 inhabitants. Industrial employment at this time accounted for no less than 80% of the local insured population and was synonymous with textiles and particularly cotton textiles. At their zenith the textile and allied industries in East Lancashire directly employed more than 200,000 people or 80% of all manufacturing employees - a degree of economic dependency scarcely imaginable today. Much of the industrial history of East Lancashire over the 20th century revolved around the unparalleled decline in the fortunes of textile and allied industries and the search for a new economic identity.

Note Data 1929-1939 and 1939-43 is interpolated.

Recent Employment Trends

East Lancashire had an estimated 205,400 employee jobs in December 2002 according to the Annual Business Inquiry, some 34% of the Lancashire total. This figure was about 2,500 higher (+1.2%) than in 1998, a rate of increase that was only a quarter of that recorded nationally (Table 1). Service industries continued to be the principal generator of jobs together with an unusually strong contribution from the construction sector. The first half of the 1990s was a period of relative stability for the area's manufacturing sector but matters changed in the latter half of the decade under the impact of high interest rates and the international appreciation in the strength of sterling. In total, between 1998 and 2002 some 11,600 net manufacturing jobs were lost in East Lancashire. Losses were spread across most broad manufacturing sectors and in many instances also entailed significant closures of long-established companies.

Within the sub-region jobs growth 1998-2002 was strongest in Ribble Valley, which enjoyed increased job opportunities across a wide range of sectors, together with more modest gains in Pendle and Hyndburn (Table 2). The out-turn elsewhere was more sluggish, particularly in Rossendale which, in addition to seeing the collapse of much of its former footwear industry, suffered a nominal loss of jobs from the relocation of MyTravel's head office (formerly Airtours) to an adjacent district.

Industrial Structure Characteristics

Over the second half of the 20th century East Lancashire showed great versatility in its ability to attract, develop and grow new sectors of manufacturing activity to replace declining textiles and allied industries. Paper, rubber and plastics, furniture, metal goods, electrical equipment, automotive and aerospace activities, amongst others, all underwent considerable expansion and even today the sub-region remains the county's premier production industry area. Despite the many decades of successive waves of restructuring and the unwinding of previous concentrations of industrial activity, manufacturing continues to underpin the East Lancashire economic base to an unusually high degree. In 2002 more than 34% of all local employee jobs were in the production industries and nearly 60,000 or 29% of the employee workforce were in manufacturing itself - a proportion more than double the national average. Whilst this represents a much reduced share from a generation ago (in 1979 some 220,000 or 54% of employee jobs were in manufacturing), there are few, if any, UK geographical areas of comparable size which continue to retain such a degree of strength in manufacturing industry. Individually, all the East Lancashire districts exhibit this manufacturing employment dependency ranging from a share of 25% of jobs in Hyndburn to as high as 36% in Pendle (against a GB average of just over 13%).

Moreover, unlike many of the other high-ranking local manufacturing areas, where dependency on a single industry or even company is often a distinguishing characteristic, the East Lancashire districts no longer have any really dominating companies and industrial strengths are spread across an extraordinarily broad range of activities from traditional consumer goods to high-technology industrial equipment. A large number of national and international manufacturing companies have successfully established themselves in the area, including the likes of BAE Systems, Akzo Nobel, Hurel-Hispano, Philips Electronics, Rolls Royce and Smith & Nephew, trading alongside indigenous companies like Baxi Heating, Daniel Thwaites, Scapa, Silentnight and Ultraframe as well as many rapidly growing small to medium-sized businesses.

The sub-region continues to have a strong representation of engineering industries. In 2002 engineering activities provided about 21,800 jobs or 36% of all local manufacturing employment. Particular strengths lie in Transport Equipment (7,500 jobs), and especially in the high-tech aerospace sector with a focus on both aerostructures and aero-engines; Fabricated Metal Products (5,300 jobs) - with radiators and boilers and kitchenware and bakeware being minor local specialities; Other Mechanical Equipment (4,200 jobs) - including other related aerospace activities like turbines; and Electrical & Optical Equipment (4,200 jobs, including significant motor vehicle electrical equipment and electronic components).

Generally within the engineering sector sub-contract engineering companies providing services to the aerospace, defence, automotive, power and other demanding sectors play an important role in the sub-region and represent a significant cluster of activity even by national standards with about 1,700 people employed mainly in small and medium-sized enterprises, many specialising in niche high tech markets.

The engineering sector continued to shed jobs over the five-years 1998-2002 enduring a net reduction of 3,500 or 14% - more or less on a par with the fall in manufacturing overall. Losses were greatest in Electrical Machinery and Apparatus (where it was automotive related, being linked with falling job numbers on the manufacture of electrical equipment for vehicles and their engines) and in Other Metal Goods, most notably amongst companies providing general sub-contract engineering services. Some of these job losses were the direct result of redundancies and company closures but it is likely that a fair proportion simply represented a re-classification to a services sector as companies continued to divest non-core activities - from cleaning and catering to information technology and distribution - in the trend towards out-sourcing. There also appears to have been much reclassifying of companies between sectors. This presumably reflects in part the industrial restructuring taking place within the area as companies, responding often to global challenges, have sought to re-position themselves into new markets or become more focused in their products and services.

Other than engineering, East Lancashire remains especially characterised by a high proportion of its employees in some of the more traditional lighter manufacturing sectors. The Textiles & Textile Products industry, whilst no-longer a dominating influence still remains the largest single industrial grouping with an employee workforce of 9,600, representing 4.7% of all jobs in the sub-region. There is only a tiny and insignificant presence in textile spinning but weaving, employing 2,100 people remains an important component of the industry. Other sectors of continuing local importance include the manufacture of made-up textiles, finishing activities and carpets and rugs. There is also a wide range of miscellaneous textile products manufacture where employment numbers have held up well. These include some of the more specialised and niche markets with higher technical and value added component. As well as textiles proper, there remains continuing activity in the manufacture of wearing apparel though this sector has suffered from global competition and the tendency towards increased overseas procurement. The real casualty, however, was in the related footwear sector which has been battling for years against ever growing import penetration in the home market. The soaring pound over the second half of the 1990s impacted very severely on this industry, which saw the size of its local workforce, drop precipitously. In 2002 footwear manufacturing in East Lancashire employed just 500 people; twenty years ago more than 6,000 people we directly employed in the industry.

Amongst other important local industries, employment levels in Food & Beverages, Non-metallic Mineral Products and Other Manufacturing (mainly furniture) all remained fairly stable over the 1998-2002 period. Against this, three other staples of the sub-region, Chemicals, Rubber & Plastics, and Paper, Printing & Publishing contracted relatively sharply, each shedding between 1,300-1,400 jobs. Principal losses within these industries included the manufacture of primary plastics and pharmaceuticals, rubber products, paper and board packaging and printing services.

Reflecting the relative strength of manufacturing within the sub-region, service sector employment, which provides the great bulk of jobs, shows a corresponding "under-representation" relative to the nation in all districts and across nearly all activities. Overall, service industries accounted for 65% of East Lancashire's employee jobs in 2002 against an 80% share nationally and 74% across Lancashire itself. Arguably, given the proven employment potential of many service sectors, this is a significant structural weakness in the economy. Historically, service industry employment growth has failed to match job losses in manufacturing and it is only over the past 10-15 years that this position has begun to improve. Despite virtually uninterrupted growth in service employee jobs for many years the local under-representation continues to be particularly marked in the higher value added and white collar producer services. The share of jobs in Financial Services, for instance, at just 1.3% compares with 4.3% in Great Britain and 2.0% in the County at large. Similarly, in Other Business Activities, a local share of 7.8% compares with 15.3% nationally.

Aside from the 18,700 people employed in the Financial & Business Services, most services employment is concentrated principally in basic sectors serving, in the main local markets. Thus, the largest employing sectors are Health & Social Work (24,800 jobs); Retail Distribution (24,200 - with mail order houses exhibiting an unusually high representation); and Education (19,800). Other sectors of note, each employing between 8-10,000 people include Wholesale Distribution, Hotels & Restaurants, Transport & Communication and Other Community and Personal Services. In total service jobs in the sub-region increased by over 11,000 or +9.3% over the 1998-2002 period. The most significant gains were made in Education (especially in primary and general education) and Other Business Services (where computer activities, real estate, labour recruitment and architectural & engineering design consultancies were particularly active) followed by Retail Distribution, Health & Social Work and Other Community & Personal Services. Viewed in slightly greater detail, there were a number of individual sectors that made an outstanding contribution to local jobs growth. Ranked in order of net new jobs created, these included the following: