City Jobs Estimates Slashed Back To 1998 Levels

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London - Cebr has cut its forecasts for growth in the number of City-type jobs.

The number of City-type jobs is now forecast to fall by 27,000 over 2011 as a whole and to remain largely flat through 2012.

These are the findings of the latest issue of London, City & Regional Prospects, a new regular publication by the Centre for Economics and Business Research (Cebr) - one of the country’s leading economic consultancies, renowned analysts of the London economy and the only commentators to both track the history and prepare forecasts for the number of City jobs.

In April this year, Cebr projected that around 2,000 jobs would be added over the course of 2011, and a further 3,000 in 2012. This figure has now been revised down to a loss of 27,000 jobs. Downward revisions were caused by the prospect of tighter financial regulation as the results of the Vickers Commission report came in, as well as by the turmoil created by the debt crisis in the Eurozone taking its toll on market activity and confidence. This takes the overall number of City‐type jobs to 288,000 on average in 2011, back to levels last seen in 1998 and well below the peak of 354,000 in 2007.

Longer term estimates show employment in City‐type jobs remaining broadly flat in both 2012 and 2013, before starting to slowly expand – an increase of between 3,000 and 4,000 jobs is expected for each of 2014, 2015 and 2016. This is in line with expectations of continuing low levels of activity in 2012 and 2013, with the Eurozone starting to recover by the out‐years and activity picking up once more.

Productivity in City‐type jobs has fallen to low levels in 2011. Both output per employee and output per hour worked have fallen steadily over the years since the recession of 2008/09, and are currently well below productivity levels seen during 2007. City firms now have ample scope to increase value‐add per employee and per hour worked rather than increasing headcount.

Rob Harbron, economist at Cebr and the report’s lead author, commented: ‘These latest estimates demonstrate how London’s role as a key centre in global finance is increasingly at risk. With the possibility of further taxation and higher regulation constraining the relative desirability of London as an important financial centre, the gap between the rising Far Eastern centres such as Hong Kong and Singapore continues to narrow.’

Summary of Cebr City Jobs forecasts (year average)

1998 - 289,666
1999 - 312,745
2000 - 323,018
2001 - 312,232
2002 - 307,678
2003 - 317,102
2004 - 324,830
2005 - 326,868
2006 - 342,968
2007 - 354,134
2008 - 323,714
2009 - 305,375
2010 - 315,000
2011 - 288,225
2012 - 287,937
2013 - 288,801
2014 - 292,675
2015 - 296,084
2016 - 299,799

These forecasts are contained in the latest issue of London, City & Regional Prospects produced by Cebr. The forecasts are updated every six months and are available with subscription to The Prospects Service from Cebr (020 7324 2850).

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