Employment Change by District
1998-2006

Introduction

The most recent benchmark count of employment in Lancashire is the 2006 Annual Business Inquiry (ABI), conducted by the Office for National Statistics. This provides information on the number of employee jobs by place of work. On the basis of the ABI count it is estimated that the number of employee jobs in the wider Lancashire NUTS-2 region increased by 43,000 between 1988-2006 (or by an average of about 5,400 per annum) to stand at an all-time high of over 610,000. This recorded net increase in jobs, amounting to +7.6% over the period was highly respectable by the sub-region's historical standards but as in the case of a number of other economic indicators, slightly lagged that of both the UK (+8.1%) and the wider North West Region (+8.0%). The Lancashire figures also conceal wide variations in job growth rates across the local area (Figures 1 and 2, and Table 1).

Figure 1 Change in Employee Jobs by District Authority, 1998-2006

Source ONS - Annual Business Inquiry

Central Lancashire

For a long period employment growth has been most robust in parts of Central Lancashire and this trend has continued over recent years. In total the area enjoyed a net increase of more than 26,000 employee jobs (+12.2%) between 1998-2006, a pace well above the national average. The area has clearly held the baton of growth for the wider sub-region, as over this eight-year period it has been responsible for the creation of more than a half of the net new jobs in Lancashire. Secular trends meant that job losses in agriculture and manufacturing continued apace with these two key sectors shedding in the order of 12,000 net jobs between them. About 5,400 jobs disappeared from the engineering and automotive industries, 2,100 from the old textiles and apparel sector and nearly 1,500 from food and drink processing with lesser losses elsewhere amongst chemicals, rubber and plastics, paper and printing, etc. In 2006 just 10.7% of Central Lancashire's employee jobs were in manufacturing (similar to the national average) compared with over 18% in 1998.

Against this pattern the construction industry and most services more than compensated with the net addition of more than 39,000 net new jobs. The prime mover within services was business activities (which include real estate activities, renting and leasing, computer services and a wide array of business activities from law and accountancy to contract cleaning and call centres) which created some 13,000 jobs. The expansion of computer services was particularly notable with job numbers more than doubling over the period. Some of the business services jobs are likely to have been "out-sourced" from manufacturing and therefore might not necessarily be "new jobs" per se. Further important job gains derived from continuing expansion of hotels and restaurants (+2,500 jobs); other services (+2,500); support transport activities (+1,900) and wholesale distribution (+1,600). However, by far the largest jobs contribution over recent years has come from public services in the form of public administration, education and health and social work. In all, these broad activities created nearly 18,000 net new jobs in Central Lancashire 1998-2006 and now account for 31% of all jobs in the area. It should be noted that a large number of these "public service jobs" were provided via the private sector either through conventional "for profit" companies or by other social or charitable organisations.

Viewed by district, Chorley has consistently been the strongest contributor to local jobs growth (as indeed it has been in terms of VAT-registered business formation) but both South Ribble and West Lancashire have also easily out-paced the national growth rate despite enduring a greater loss of manufacturing jobs. Growth in Preston, Lancashire's largest single was more or less on a par with the nation. Business services jobs growth has been a key component for all areas (particularly notable in Chorley but less so in South Ribble) and continues apace. A major and unprecedented expansion in construction jobs (notably in South Ribble) has also been of note though this trend now appears to have run its course. Hotels and restaurants and retailing also contributed to growth; the latter made a significant impact in South Ribble and West Lancashire, was stable in Chorley but fell considerably in Preston due to some restructuring within the "home shopping or mail order sector. Numerically, however, the combined role of public administration, education and health and social work was easily the prime mover in job creation across all four districts. These sectors, which incorporate some of the largest employing establishments in the area have seen virtually uninterrupted growth over the period. Their share of the local job count has grown and ranges from a quarter in South Ribble to as high as 37% in Preston.

Figure 2 Change in Employee Jobs by Local Authority, 1998-2006

Source ONS - Annual Business Inquiry

North Lancashire

In North Lancashire employment growth between 1988-2006 at just 4.2% was also close to the national average. There was a particularly strong contribution from Fylde and Lancaster but with a rather more subdued position in Blackpool and Wyre. Manufacturing jobs across the sub-region have fallen in number, most especially in the chemical and allied plastics and nuclear industries (-1,300 jobs), in the hitherto significant food and drink processing sector (-1,300) and paper printing and publishing (-1,100) and across other smaller sectors. However, in spite of these job losses, the manufacturing sector has continued to hold up better than in most other parts of Lancashire. This has been attributable to the very sizable aerospace industry presence that accounts for more than 40% of all manufacturing jobs in the area. Despite periodic job cuts/rationalisation announcements in this particular local industry, total employment has many fairly stable for many years as aerospace work from other UK sites has consolidated in Lancashire.

North Lancashire has long been more of a service than production dominated economy but recent job trends in many service sectors have been more muted than previously. There have been particularly strong out-turns in the business and related activities such as computer services and property services (+8,000 jobs) and education (5,700) together with hotels and restaurants (3,700 jobs), part of the areas key tourism offer. Positive gains were also recorded in health and social work and in other services though growth in both these areas was far more restrained than might have been expected. On the downside a number of transport activities and financial services (particularly insurance-related) have shed jobs. Of particular note have been employment trends in the public administration sector. This was a key growth area in North Lancashire over much of the 1980s and early 1990s linked with central government job dispersal programmes but appears to have stalled over recent years largely related to increased automation of routine work and rationalisation across a number of locally based central government agencies. The reduction of jobs in compulsory social security activities handled by the Department for Work and Pensions appears to have been particularly severe. However, in spit of this the core public services in the form of public administration, education and health and social work still comprise nearly a third of the total employee job count in the sub-region.

East Lancashire

The experience of East Lancashire over the 1998-2006 has been the least favourable of the three sub-regions, recording a net reduction in its total employee jobs headcount of about 1,300 or -0.6%. In job creation terms Ribble Valley was to the fore with a net jobs gain of over 10% though this district is relatively small comprising less than 12% of the area's total employee jobs. Elsewhere Pendle had negligible growth whilst Blackburn, Burnley, Hyndburn and Rossendale all suffered employee job reductions to a lesser or greater degree.

For many years, continued strong dependency throughout the area on traditional manufacturing industry (which still provides jobs for nearly a quarter of all local employees – a level twice the national average) and a correspondingly weaker service base has been a major constraint on employment generation in the sub-region. With ever improving productivity, manufacturing has shed jobs for decades, and a further 23,000 (-32%) were lost between 1998 and 2006. Of particular note were the disappearance of about 7,400 jobs from the older textile and apparel sector and 2,100 from the footwear industry – a combined drop of about 70%. Footwear has now all but disappeared as a local manufacturing activity and some textile sectors are following rapidly. A substantial 3,300 jobs were shed from the paper, printing and publishing industries with lesser reductions in chemicals, rubber and plastics, and other manufacturing. The engineering sectors continued to contract, particularly in electrical and optical equipment, though the scale of losses in areas like fabricated metal gods, mechanical equipment and transport equipment was much less severe than in the more traditional activities.

Proportionately the scale of the manufacturing job reduction in East Lancashire has not been much greater than that experienced nationally. The difference is that the sub-region has failed to compensate fully for these losses through the expansion of construction and some of the service activities. A surge in new construction jobs across East Lancashire has provided a useful complement though growth in the sector has been less strong than elsewhere across Lancashire. Growth of the generally buoyant business and related service activities was, encouragingly, more rapid than nationally though slower than in many other parts of Lancashire and from a much smaller base. The sub-region has also seen encouraging growth in wholesaling (possibility reflecting a shift by former manufacturing companies) and in hotels and restaurants. The main area in which East Lancashire appears to have "under-performed" has been in the provision of public sector activities. The public administration jobs count appears to have fallen over recent years and whilst the area has participated in growth of new jobs in both education and health and social work this seems to have been of a lesser order than in many other parts of Lancashire or indeed, by comparison with the national average pattern. Overall, some 53,600 (or 26.5%) of East Lancashire employee jobs are within these three broad public services categories compared with a share of 31.7% in Lancashire West and a national average of 26.9%.

Note

As a note of caution, whilst the district authority estimates of employee jobs given in Table 1 above certainly reveal general trends over time, they should be interpretated pragmatically because of undoubted inaccuracies in the employment surveys. These include the misallocation of establishments and their employees both between districts and industrial headings for which it has not always been possible to make appropriate adjustments and the allocation of some employees to their "pay points" (e.g. a head office) which is not necessary where they work. The selection of start and end dates in the analysis can also be a significant feature in some instances.