Labour Market Bulletin

Introduction

Welcome to the third Quarterly Labour Market Report

Welcome to the third Quarterly Labour Market Report from Warwickshire Means Business – part of our commitment to keep you fully updated on the very latest Labour Market trends in the county.

This report combines a wide range of data sources to illustrate Warwickshire’s labour market trends up to the latest quarter.

The Quarterly Labour Market Report gives insights and analysis into employment and unemployment; economic activity and inactivity; and real-time demand in the current labour market (based on advertised job vacancies). The information presented is available at district/borough level as well as for the sub-region and the wider West Midlands area.

All labour market research is collected and released every January, April, July and October and we will be bringing it to you here as soon as we have it to keep you right up to speed with everything you need to know about employment trends in Warwickshire. We will also include any relevant business headlines associated with inward investment and additional data indicators, depending on availability.

We hope you find this information useful as you plan for your business for the rest of 2017 and beyond. Our next Quarterly Labour Market Report will be published here in October.

Sam van de Schootbrugge, Economy and Skills Group, Transport and Economy Business Unit

QLM Summary

Labour Market Summary

Although not the biggest surprise of the last three months, Warwickshire’s labour market performed unexpectedly well during the last quarter. In the face of an uncertain economic climate, the county continues to disregard UK-wide growth insecurities by expanding its workforce. The local success seems to be demand-driven, with growing business confidence and business activity leading to above-average job vacancies and job growth.

Each quarter, counter-balancing labour market forces eventually transpire into changes in the employment and unemployment rates. The prevailing direction in the last eight years has been towards a higher-than-average employment rate and lower-than-average unemployment rate. Data for the first quarter of 2017 reinforces this trend, with the gap between Warwickshire and the UK widening.

Short-term improvements in the 16 to 64-year-old labour force participation, driven by an increase in female workers and job market growth, have outweighed an increase in out-of-work claimants. On the other hand, longer-term changes suggest that a growing older population is beginning to place a strain on an ever-apparent skills shortage.

The good news continues to shine through across many facets of Warwickshire’s labour market. In addition to the positive short-term fluctuations, we have seen the long-term unemployment level reach a 13-year low. Skill levels and advertised wages are also on the up, which will be key for the sustainability of Warwickshire’s economic success.

Key Labour Market Indicators 

Table 1

 Highlights of the Q1 2017 data for Warwickshire:

  • The employment rate rose 1.0%.
  • The number of jobs advertised increased 24.5%.
  • The unemployment rate decreased 0.5%.
  • The out-of-work benefits increased by 0.1% on last quarter.
  • Labour force participation fell 0.2%.
  • Population growth of 0.5% over the last year.

Labour Demand

Employment

The proportion of the population in work represents the demand for workers in the economy.

When more people are employed, we can deduce that employers are looking to expand. The outlook of the economy will be shaped by developments in the demand for workers as businesses often only look to expand if demand for their goods is high. Greater employment in response to greater demand translates into a healthier local economy.

The following table is a summary of employment statistics:

 Table 2

In contrast to last quarter, Warwickshire has seen a rise in the employment rate from 76% to 77%. This is the largest quarter-on-quarter rise in three years and can be explained through two channels. Firstly, more people have found work (either part-time or full-time) compared to the previous period, and secondly, the working-age population has shrunk. Although the former shows that we currently have a very buoyant labour market, the latter highlights our reliance on attracting workers from outside the county to keep up with the high business activity in Warwickshire.

The historical employment rates for Warwickshire have been mapped on the following graph:

 Graph 1

Warwickshire’s employment rate is currently higher than that of both England and the West Midlands. The graph indicates that this above-average performance has been the norm rather than the exception over the last seven years. In the last issue we discussed the possibility of the county’s rate stagnating - instead we have seen the first divergence from the national rate in 18 months.

Without doubt, an element of this unanticipated growth is a by-product of strong job market demand locally, but structural changes in Warwickshire are also playing a role. The consistently higher employment rate in the county alludes to a fundamental difference in the labour markets; a relatively large and growing older population that is leading to a falling participation rate. This bulletin focuses on this structural difference.

Table 1 indicates that the better-than-expected labour market performance was almost uniformly distributed among the districts and boroughs. Graph 1 maps the changes in the sub-regional employment rates for the two employment age categories.

Graph 2

Employment rate changes for 16 to 64-year-olds is at the top of the graph and 20 to 34-year-olds at the bottom. For all except Warwick, the employment rate has increased over the last quarter, with the largest rises coming in Nuneaton & Bedworth and North Warwickshire. It is positive to see the strong improvement in the employment rate in Northern Warwickshire. As was shown in our previous issue, the historical employment rates of Rugby, Nuneaton & Bedworth and North Warwickshire are more volatile and responsive to improvements in the economy. Large rises in the employment rates in these boroughs often coincide with a strengthening Warwickshire economy.

Drops in the employment rate within the so-called Magic Demographic (20-34) can also be representative of a healthy economy. Job turnover, or the movement of workers from one job to another, tends to be higher among young workers. In a buoyant labour market with relatively many job opportunities, it also tends to be easier to find work. A combination of the two could lead to relatively more young workers being temporarily unemployed as they move between jobs. This is referred to as frictional unemployment - where a fall in the employment rate is due to people voluntarily leaving their place of work.

If the fluctuation in the employment rate among this age-group persists, it will be important to understand the impact the National Living Wage (NLW) has on Warwickshire’s workforce. In April the NLW rose from £7.20 to £7.50, which is anticipated to cost approximately 15,000 firms £484 per year in Warwickshire (WCC research). Theory suggests this could have two opposing impacts: it could discourage job-seekers if firms are less willing to hire at the NLW, or it could improve working conditions and reduce job turnover.

 

Job Market Demand

Job Market Demand

This section provides an overview of the most recent labour market demand in Warwickshire. The data used for this section is based on real-time job vacancies and can give useful insights into how the labour market is changing before publicly-available data is released.

Table 2 shows the number of jobs advertised in Q1 2017 versus Q4 2016 in numbers and ratios.

Table 3

We continue to see stronger-than-average growth in the number of jobs listed in Warwickshire. This quarter is now the sixth in a row where job listings have increased. If we account for size, the county has almost double the number of vacancies than the England average, and it continues to grow at a faster pace. This is undoubtedly contributing to the improving employment rate in Warwickshire.

It is worth noting the discrepancy between the demand for labour from businesses (job vacancies) and the demand for labour in Warwickshire (employment rate). The two do not necessarily move in the same direction - in fact, last quarter, they didn’t. Growing firms and high business activity could translate into a larger number of job listings, but these jobs may not necessarily be filled by residents in Warwickshire. Indeed the excellent commuter links between Warwickshire and the surrounding counties makes it relatively easy to commute into work.

When the two measures of demand move in the same direction, as they have this quarter, it is difficult to distinguish the direction of causality. Does an increase in job postings reflect the difficulty in hiring because there are fewer job-seekers to choose from? Or are there few job-seekers because of an increase in the job postings in the area?

The former could be characteristic of an economy that some would say is close to full employment (click here for an explanation of full employment). Warwickshire and the rest of the country are considered to be at, or close to, full employment. In this environment there are relatively few job-seekers going for many job vacancies. This will increase the number of job vacancies per successful applicant, leading to an increase in listings. A labour market struggling to fill vacancies will inevitably be one in which skills shortages are common. Given that one in three businesses in Coventry & Warwickshire report a skills shortage as their biggest barrier to growth (C&W QES Q1 2017), it is likely that hiring-difficulties are playing a large role in generating the strong growth in job listings.

This problem is exacerbated by the uncertainty behind Brexit and the lack of clarity about future immigration rules. There is evidence to suggest EU nationals are less willing to move jobs because of this uncertainty, making it even harder for firms to employ. Data shows that this phenomenon is more prominent in Warwickshire and the higher growth in job vacancies in the county could reflect our relatively high dependence on EU workers in the county.

Graph 3

Graph 3 shows how job listings in Warwickshire have increased at a faster rate than the rest of the country over the last five years. Not all of this growth will be due to hiring difficulties in the county. Part of this strong growth reflects the better-than-average performance in business activity. Last year 111 new businesses per 10,000 population started in Warwickshire, up 12% on the previous year and well above the national average (99 per 10,000). The growth in business activity and skilled job vacancies have contributed to strong productivity growth. As discussed in the previous issue, Warwickshire has one of the fastest growing rates of productivity in the country.

Warwick district has been a major contributor to this demand, with job postings increasing 13% since Q4 2016. Table 3 expands on the number of job listings by location in Warwickshire. These five areas have remained in the same order as the previous quarter.

Table 4

Table 4 gives an indication of which type of jobs are most in demand by location. As we can see, IT professionals are highly sought after in south Warwickshire. Last quarter, North Warwickshire and Rugby had several job vacancies for road transport drivers. We assumed that this was due to the increase in demand around the festive period. This quarter we have seen an increase in sales, marketing, business, finance and related associate professionals in North Warwickshire, but large goods vehicle drivers remain most in demand in Rugby.

Table 5

The distribution between high and low-skilled jobs in the economy is important. High-skilled jobs are a key component in driving productivity growth because they contribute towards innovation, competition and enterprise. They are also less likely to be replaced by automation in the future.

Graph 4 looks at the composition of high and low-value sector jobs within Warwickshire over the last three years. High-value jobs are defined within the literature as jobs requiring NVQ level 3+ qualifications which include, but are not limited to, A-levels and Advanced Apprenticeships.

Graph 4

There are a couple of key points. Firstly, both groups are growing. This is the reason for the strong increase in job demand in Warwickshire. Secondly, there is a divergence between high and low-value sector jobs. Clearly there is a growing demand for better qualified workers within the county’s labour market.

Table 3 gives the top five occupations in demand in Warwickshire - IT and Engineering professionals are clearly the most demanded. The following graphic shows the top five job titles within these two occupations.

Circles diagram

Warwickshire has historically had a smaller than average knowledge-intensive sector. Jobs within this sector are considered to be at the forefront of innovation and ideas. In the last year, however, job vacancies within the knowledge-intensive sector have grown 27.1% compared to 19% regionally and 20.5% nationally. Table 3 gives the top five knowledge-intensive sector jobs in demand in the last quarter.

With better skills being demanded within the workforce, we would expect an increase in the average wage offered for the job listings. The following graphic shows the wage distribution for Warwickshire and each district and borough.

Graph 5

The average advertised wage in Warwickshire has increased from £31,914 to £32,758 over the last three months. The highest salaries on offer are in Warwick, whereas the lowest can be found in North Warwickshire. Nuneaton & Bedworth has the largest proportion of jobs within the £30,000-£39,999 wage category (24% of jobs), and Warwick has the largest number of jobs offering £40,000+ (28% of jobs).

Although wage growth has been weak nationwide, last year weekly average wages grew 8.7% in Warwickshire – three times the national average. The real-time average wages associated with job listings in Warwickshire show one of the reasons why wage growth has been so strong - the composition of Warwickshire’s workforce is undoubtedly becoming more skilled.

Subdued wage growth generally has been an conundrum for policy makers. Wage growth is strongly linked to productivity and unemployment. The former has been weak over the last six years in the UK, whereas the latter has fallen to a six-year low. The effects of these move in opposite directions, however, and alongside Brexit uncertainty, growth in the low-wage economy, cheap overseas labour and automation in the workforce, the prevailing direction is towards slow wage growth.

On the other hand, Warwickshire has seen a variety of factors pushing in the direction of faster wage growth. Relatively strong productivity growth, low unemployment, shrinkage of the low-wage economy and high numbers of job vacancies could be some of the factors at play within the local labour force.

It will be interesting to see how wage growth has progressed during 2016/17, as increases in external costs following the depreciation in late 2015, inflation increases and market uncertainty trickle into the equation. Data for Warwickshire will be released in November 2017, and will feature in the first Quarterly Labour Market bulletin in 2018.

 

Labour Supply

Unemployment

Labour supply indicators are crucial in assessing an area's current economic performance.

Unemployment, economic activity, qualifications and labour productivity are regarded as forming the ‘potential supply of labour’ and these are essential in forming economic policy and investment decisions. For example, the amount of slack in the economy – the gap between demand and potential supply – is a key determinant of wage growth. A smaller gap or less slack (i.e. the more people are in work) means businesses have fewer workers to choose from for each position, which subsequently increases the bargaining power of the worker. More bargaining power translates into increases in wages and thus, wage growth.

Unemployment

The following table is a summary of unemployment statistics:

Table 6

Last issue we saw a rise in the unemployment rate from 3.3% to 3.4%. This quarter, however, the unemployment rate has fallen from 3.4% to 2.9%. This would suggest that increasing job vacancies, strong business confidence and an increase in labour force participation have helped to reduce the number of unemployed by 1,100 people. The fall in the unemployment rate was the first in two years in Warwickshire and we have, once again, widened the gap with the national rate.

This relatively large fall reinforces the view that Warwickshire has a tight labour market – those who wish to find work can find work relatively more easily in the county compared to nationwide. The following graph depicts the current unemployment rate relative to the 20-year average.

 

Graph 6

Even when taking into account the effects of recessions, every area (with the exception of Rugby and Stratford-on-Avon) in the sample has a current employment rate lower than its 20-year average. This implies that the current number of job-seekers is lower than it has usually been in the last 20 years. A tight labour market should result in wages growing over the coming months.

Graph 5 maps the historical changes in the unemployment rate across Warwickshire.

Graph 7

There have been no large changes in the unemployment rate in the sub-regions of Warwickshire. Stratford-on-Avon continues to have the lowest unemployment rate, although it has been gradually increasing over the last 18 months. In contrast, Nuneaton & Bedworth’s unemployment rate has almost halved in six years and declined in four consecutive quarters. Latest GVA data released by the Office of National Statistics also indicates that the borough is the fastest growing area, in terms of GVA, in Warwickshire.

The rise in out-of-work benefits in Warwickshire will be swayed by the introduction of Universal Credit. Rugby and Stratford-on-Avon have two of 11 Jobcentres in Central England Group delivering Universal Credit Full Service. Instead, it is more informative for us to focus on the change in long-term unemployment, as calculated by those claiming Jobseekers Allowance for over 12 months.

Graph 8

Taking October 2004 as the reference point for England, West Midlands and Warwickshire, we can see the evolution of the long-term unemployed over 13 years in Graph 6. The two ‘humps’ highlight the impacts of the double-dip recession. The data suggests a greater level of resilience in the Warwickshire labour market. Not only did long-term unemployment recover more quickly after the initial recession, the subsequent recession was also less severe. The result is that only 0.1% of Warwickshire’s population now claim for over 12 months compared to 0.6% in the West Midlands and 0.4% across England. Since 2004 this has decreased 28% in Warwickshire, but increased 53% in the West Midlands and 21% across England.

 

Labour Force Participation

Labour Force Participation

Labour force participation affects the supply of workers into the labour market. Fluctuations in labour force activity are generally correlated with employment opportunities. Better opportunities entice people to join the workforce. For example, higher wages, more vacancies, employment benefits and flexible working hours/contracts should all improve short-run participation. However, higher household income, uncertainty in the labour market and less job security can discourage potential employees.

Graph 9

Graph 7 shows the quarter-on-quarter working-age labour force participation change. The improvement in labour force participation among the working-age population over the last quarter will have contributed towards the fall in the unemployment rate. Increasing wages and job vacancies will undoubtedly be enticing workers into the workforce, however the increasing prices UK-wide could also be contributing to the change. The recent increase in 16 to 64-year-old participation comes from the increase in female activity. Inflationary pressures over the last year means less money in the pockets of households, potentially increasing the need for more people to join the workforce.

Nuneaton & Bedworth has been driving the increase in working-age labour force participation over the last quarter. On the other hand, Warwick is the only district that has seen a reduction in its labour force participation. We have already discussed the increase in the National Living Wage and how it is most likely to impact younger workers. Warwick District has a large student population and over the last quarter, participation among 16 to 24-year-olds in this area has decreased from 54% to 46%, compared to 62.3% to 62.0% across Warwickshire.

With a growing older population, participation among the over 65 category is becoming increasingly important. The following graph looks at how this has changed over the last 12 years.

Graph 10

Warwickshire’s over 65 participation is high and growing. This mirrors a nationwide change where the elderly need to work until a later age. This will impact the overall participation level if participation among this age group does not offset the fall in participation due to an ageing population. The blue line in Graph 8 represents the overall participation level in Warwickshire.

Graph 11

There has been a fall in 16+ labour force participation in Warwickshire over the last eight years – the workforce is now only 94% of what it was in 2008. This would suggest the growth in the over 65 population is only partially offset by the increase in their participation, thus creating a demographic drag. England, on the other hand, has seen its participation rate marginally increase over the same period. In the long run, a falling participation rate will continue to push down the natural rate of unemployment.

Population Growth

Population growth

Population growth is a key driver of increases in the potential size of the workforce. A growing population affects both the supply of labour and demand for goods in the economy. This section looks at annually released data on the population within Warwickshire.

Graph 12

Warwickshire’s current population stands at 556,750, an annual growth of 0.5%. This increase is smaller than the regional and national averages (0.9% each). In fact, since 2008, the population of England and the West Midlands has consistently outgrown the county’s. A lower population growth will result in a smaller supply of labour in the future which will increase our reliance on workers from outside Warwickshire.

What is more striking is the change in the composition of Warwickshire’s workforce. The following table shows the growth in 0-15,16-64 and 65+ population numbers since 2000.

Table 7

Not only has Warwickshire experienced a smaller increase in 0-64 year olds, the over 65 category has increased much faster than elsewhere. Therefore, not only is Warwickshire’s population not growing as fast, its elderly population is becoming larger and larger. These work together in creating a larger dependency ratio.

To get a better picture of how the population has changed relative to the national picture, look at the following population pyramids.

Graph 13

For the first two pyramids, dark blue is the proportion of males and red the proportion of females in Warwickshire and England in 2016. The lighter colours are the proportions in 2000. By placing the 2016 pyramid on top of the earlier 2000 one we can see how demographic of the population has changed.

In Warwickshire, the top half of the pyramid is much fatter than England, and the lack of lighter colours shows it has increased since 2000. On the other hand, a relatively larger proportion of lighter colours around Warwickshire’s 30-45 age-band highlights a hollowing-out of the working-age population. Finally, a relatively thinner base shows a smaller (and shrinking) future workforce, increasing working-age dependence for the next generation.

The pyramid on the far right maps the difference between Warwickshire’s and England’s 2016 demographic structure. The green shows a larger proportion of people aged 45+ in Warwickshire. It is another way of highlighting our relatively large ageing population.

The last sequence of graphs is the change in population structures across Warwickshire since 1992. Stratford-on-Avon has seen the largest decline of its working-age population and the largest increase in over 65s.

Graph 14

Warwick District has the largest proportion of working-age residents. The number of 18 to 24-year-olds in the district has grown 37% over the last 16 years. This shows the influence Coventry and Warwick University have on the local population. In fact, the 20-24 age category has been the largest growing category under 65 since 2000, growing 25% in Warwickshire. Retaining these students will be important to offset the growing older population.

Jargon Buster

Jargon Buster: Full employment and slackness in the labour market

This section explains two key economic principles that are finding prominence within the press; full employment and labour market slackness.

Full employment is a counter-intuitive term which actually refers to a particular level of unemployment. The unemployment rate* is a measure of the amount of able and willing workers who are currently out of work. The employment rate is a measure of the amount of able workers in work. The latter includes those who are economically inactive (those not willing to work), therefore, 0% unemployment will never coincide with 100% employment. Furthermore, full employment is not 100% employment or 0% unemployment.

The unemployment rate can never be zero because of: 1) Frictional Unemployment - people moving between jobs who, as a result, may be temporarily unemployed. 2) Structural Unemployment - people being out of work due to industrial organisation (like people losing their jobs to machines). These people then need to re-train to find employment. 3) Skills mismatch - there will always be a proportion of people who cannot find work because their skills are not right for the job. Therefore, there will always be some level of unemployment.

We can then easily deduce that the employment rate could never be 100%. Not only is there always a proportion of the workforce who will not want to work (students, sick, inactive etc.), if there is some level of unemployment, by definition, we cannot have 100% employment. As a result, full employment will be at some positive rate of unemployment and at an employment rate much lower than 100%.

An easy way of grasping the full employment level is by using a sequence of illustrations representing different economic scenarios. Below are three seesaws containing two counter-balancing weights; the unemployment rate and wage growth.

Scales graphic 1

Firstly, consider a scenario in which the unemployment rate is high (1). In this case, a large proportion of people, who are able and willing to work, will be out of work. The economy is effectively not utilising all the labour at its disposal and will therefore not be growing as fast as it can. Wage growth will be low for two reasons; One - there are more unemployed people to choose from for each vacancy, reducing the bargaining power of each worker. Two – an under-performing economy will not be able to afford higher wages.

On the right seesaw (3), the unemployment rate is low. The economy will be utilising almost everybody who is able and willing to work. If we apply the two variables in the first scenario, wage growth will be high; One - the pool of unemployed will be smaller and to get the right person for a job you either have to pull them away from another job or incentivise those who are economically inactive. Both require higher wages. Two – an over-performing economy will be able to afford higher wages. Higher wages will result in higher costs for businesses and subsequently higher prices for consumers. This is one way low unemployment creates inflation.*

The last scenario (2) is the point of full employment. The unemployment rate is at a level where all the workers who can easily or usefully be hired are working, and new hires can only occur by luring people from jobs by offering them higher wages. This level of unemployment is known as the natural rate of unemployment. This rate has typically been 4.5% for the UK, however it varies by economy. In short, it will depend on skills and education, the degree of movement between jobs, the supply of labour, and the sectors most prominent in the economy.

Using what we know, let us take Warwickshire’s economy as a case study. Skills and education within the economy are generally higher or on-par with the national average. A better-skilled and qualified workforce tend to be employed in better jobs. Job turnover (the movement from one job to another) is lower among better-skilled occupations, reducing the movement of workers between jobs. The workforce is also relatively small (large older population), meaning the pool of unemployed will be absorbed relatively quickly if the demand is there. These factors play a role in reducing the natural rate of unemployment, showcased by Warwickshire’s consistently low unemployment rate and high employment rate.

Slackness describes the responsiveness of wages to changes in the labour market. When a labour market is slack there are many job-seekers chasing a few vacancies, corresponding to low wage growth. This will tend to be the case in Scenario 1, above. When the unemployment rate is high, there are many job-seekers, and because the economy will be under-performing, firms will find it hard to create jobs. Consider a coil on the below seesaw - when the coil is slack, the labour market will be slack, and wage growth will be low.

However, if the unemployment rate drops, the coil will become taut. In this case, it is said that the labour market is tight. Intuitively, this is a scenario in which there are many vacancies chasing few job-seekers. We can, therefore, imagine that at the natural level of unemployment, or full employment, the labour market will be tight and that wages will begin to rise.

Scales graphic 2

The degree of labour market slackness helps policy makers estimate the natural rate of unemployment. The point at which the unemployment rate coincides with a ‘normal’ level of wage growth (when wages grow at the same rate as inflation), will depend on the responsiveness of wages to unemployment changes. This responsiveness, or slackness, will depend on the balance between labour supply (which is dependent on the unemployment rate, participation, population and hours worked) and labour demand (dependent on the employment rate and job vacancies).

Again, let us take Warwickshire’s economy as a case study. On the supply-side, Warwickshire’s unemployment rate is below its long-run average. Participation of the 16+ population is declining and the older population is growing faster than the increase in over 65 participation. On the demand side, employment is increasing and the number of job vacancies is growing at a faster-than-average rate. We should, therefore, assume that Warwickshire’s labour market is tight and that wages will respond strongly to this fall in unemployment. In the past year, wages have already started to increase in the county and one could assume that they will continue to outgrow the national average.

*An example of low rates of unemployment was during post-war periods. The only reason wage-growth and inflation did not increase at an unsustainable rate during these times is because the majority of workers were in low-skilled, low-wage jobs. These tended to have less bargaining power and thus saw smaller increases in wages.

Business Headlines

Business headlines...

Local councils were recognised for their support for small firms as part of the annual Federation of Small Businesses (FSB) Local Authority Awards.

At the FSB’s annual ‘Small Business Engagement’ lunch, all councils in Coventry, Warwickshire & Solihull were asked to make known any project or initiative that promotes and champions local economic development. Four awards focused on small business friendliness:

Best ‘small business friendly’ campaign

Best ‘small business friendly’ procurement policy

Best ‘small business friendly’ regulation policy

Best all round ‘small business friendliness’

The awards form part of FSB’s lobbying activity to ensure that at every level of Government, entrepreneurs are viewed as potential wealth, growth and job-creators of the future. Small businesses account for 99.3% of the private sector in the UK, so it’s vital we do everything we can to make it easier for them to thrive.

This year’s winners were: Warwick District Council, for both the best procurement and regulation policies; Nuneaton and Bedworth Borough Council for the best campaign; and Solihull Metropolitan Borough Council and Warwickshire County Council, joint winners for best all-round small business friendliness.

 

Southam-based machine tool supplier Engineering Technology Group has pledged to tackle the skills gap after making a £6m commitment to developing a network of technical academies.

ETG managing director Martin Doyle made the announcement at the launch of the company's first facility at Norton Motorcycles in Castle Donington and laid out the vision to create a further 14 centres across the UK.

The academies, all to be located on the site of a manufacturing partner, will provide companies with the opportunity to upskill their staff on the latest CNC machine tools and precision technology, with some providing a full apprenticeship curriculum.

Mr Doyle said: "There is a real need for industry to get to grips with developing the skills of the next generation of engineers and those already working in the sector.

"Put bluntly, the current education platform is broken and not relevant to the world we operate in. Instead of bemoaning our luck and lack of support, we’ve decided to do something about it with the launch of our national network.

 

Rugby’s open air shopping complex the Swan Centre has been sold to Caracal Properties in a deal worth more than £3m.

Property consultancy Harris Lamb was instructed by the former owner to sell the centre and deals will now be sought to let vacant retail units at the Chapel Street shopping centre.

Caracal has also secured a change of use on the former Co-operative building to enable it to be transformed into a restaurant quarter.

Harris Lamb's head of retail David Walton said: "This was a fantastic opportunity for Caracal. In all, the centre comprises 16 retail units at the heart of the town centre, with close proximity to the town’s Clock Towers Shopping centre and the recent Asda development, which offer a combined 429 car parking spaces for visitors to the town.

 

Department for International Trade reported FDI projects up for 2016/17 despite concerns about Brexit.

The story regionally was mixed as the East and West Midlands recorded falls for the period. Coventry & Warwickshire bucked the trend, though, with supported projects, where DIT or local partners such as Invest in Warwickshire or CWLEP supported, were unchanged at 35 projects.

 

Revenues have rocketed toward the £250m mark at the Exhall-based UK arm of German car parts supplier Brose, whose clients include Jaguar Land Rover, Toyota and Nissan.

Newly filed accounts revealed turnover jumped from £197.6m to £244.1m in the year to 31 December 2016. However, pre-tax profit fell from £4.1m to £2m.

A statement accompanying the results said the revenue increase was down to an increase in the production of seats for the Land Rover Discovery.

 

Jaguar Land Rover continued to improve and expand its facilities in the Coventry & Warwickshire sub-region.

A new office facility at Fen End, where the company has an additional test track to complement the facilities at Gaydon, was operational from May. The site supports the Specialist Vehicle Operations side of the business, which has a production facility at the former Peugeot site in Ryton, now known as JLR Oxford Road.

 

Aston Martin Lagonda recruited 100 new engineers to drive forward the development of new products, including the DBX crossover and the recently announced electric hybrid powertrain and Rapide E concept.

The company also took an additional logistics unit at Wellesbourne, where the company also has its low volume supercar production facility.

The Vakyrie hyper car, the replacement for the low volume Vulcan, broke cover in July.

 

Geely London Taxi Company, which recently moved to a brand new manufacturing and R&D HQ at Ansty Technology Park, celebrated the launch of its new hybrid electric taxi the TX by changing the company name to ‘LEVC,’ the London Electric Vehicle Company.

The name change takes effect from September, with first deliveries of the new taxi starting in October.

The opening of the new factory was a major milestone for UK automotive, as it was the first purpose-built electric vehicle manufacturing plant in the UK, and the first new volume car plant in over 10 years, and represents and investment of over £300m in UK automotive.

 

The Coventry & Warwickshire area has really powered ahead in electric low carbon vehicle technology in the last 18 months, with the emergence of a new brand in the LCV taxi market.

ADV Manufacturing, a supplier to McLaren and Bentley, launched the Dynamo Electric at the Milton Keynes Taxi Show. It is the first fully electric hackney carriage for the UK.

The Bedworth-based business, part of the Bayton Road Industrial Estate auto cluster, has developed the vehicle based on the Nissan.

 

Nuneaton & Bedworth Borough Council, with support from Coventry & Warwickshire Growth Hub and Invest in Warwickshire, hosted a Nuneaton & Bedworth Business Support Expo at Nuneaton Golf Club.

Keynote speaker Terry Spall talked about coming developments at MIRA Technology Park, including the new MIRA Technology Institute, opening next year. Other speakers included West Midlands Mayor Andy Street and Lisa Garley Evans of Holland & Barrett.

Local entrepreneurs and businesses were able to speak to representatives of the wide range of business support services available in Coventry & Warwickshire. They were also able to see, and take a drive in, the new Dynamo fully electric taxi, developed by ADV Manufacturing in Exhall’s Bayton Road.

 

HORIBA-MIRA opened a new emissions testing facility at its engineering consultancy base on the A5 near Nuneaton. The new Advanced Emissions Test Centre (AETC) adds to the already strong Coventry & Warwickshire automotive offer.

Developed in response to increased scrutiny around tailpipe emissions, as well as new legislation requiring extensive and increasingly complex testing methodologies, the AETC represents a total of almost £8m investment into HORIBA MIRA’s engineering facilities.

The 12,000 sq. ft facility was officially opened by HORIBA Chairman, CEO and president, Mr. Atsushi Horiba, and the UK Ambassador to Japan, Paul Madden.

 

Birch Coppice, the premium manufacturing and logistics business park in North Warwickshire, between Atherstone and Tamworth, has achieved a milestone with its latest tenant joining the park, the Chinese white goods maker Beko.

Beko has taken the final two units at the park, agreeing 15-year terms on the 282,000 sq. ft. and 63,000 sq. ft. units. The units were bought last year by Aberdeen Asset Management as part of a speculative investment. The move allows the company to consolidate two sites into one, moving from Birmingham and locally Hams Hall Distribution Park.

The business park now employs in excess of 6,000 people, with tenants including Ocado, VW, Autins and DauDraxelmaier.

 

The Coventry & Warwickshire Business Festival, which will take place this year between November 20th and December 1st, was officially launched and applications for events during the two weeks are now invited.

The event is intended to stimulate business growth in the area and bring the region together once a year to interact, engage, promote, support, learn and discuss business under one branded banner – the Coventry & Warwickshire Business Festival.

Around 50-75 seminars, lectures, workshops and conferences are expected to take place over the fortnight. All events in the Festival will be put on by local companies, which can apply online between June 16th and September 22nd to hold an event as part of the Festival.

 

A new multimillion pound centre of design excellence, to support UK innovation in the transport industry and boost efforts to bridge a shortfall in essential creative skills, has opened at Coventry University.

The National Transport Design Centre (NTDC), was funded through the Coventry and Warwickshire Local Enterprise Partnership and the government's multimillion pound Local Growth Deal, with an initial £7 million contribution.

State-of-the-art features of the NTDC, which forms a key facility for the University's existing Centre for Mobility and Transport, include: a 6m interactive power wall which allows users to explore detailed design and engineering concepts in virtual reality; advanced clay milling facilities for creating physical models of vehicles; a projection mapping system which can cast digital images onto 3D objects below; and serviced office space for companies active in transport technologies.

The centre's official opening was in May and the annual Coventry & Warwickshire Automotive Dinner, hosted by the NTDC this year along with Coventry City Council and Warwickshire County Council, brings together the local auto industry to meet and network.

 

Rail Live, organised by the Rail Alliance, the rail B2B trade body based in Long Marston, took place again this year at the Quinton Rail Technology Centre (QRTC).

The event attracts thousands of exhibitors and delegates from across the rail industry, including companies active in trackside services and technologies. The show allows companies to demonstrate their technologies and services in a real trackside environment.

This year local train maker Viva Rail, who have developed the new D-Train, launched its first passenger train service, with a temporary shuttle between the Long Marston site and Honeybourne. Delegates could choose to travel from London via Paddington or from Birmingham via Snow Hill to connect with the shuttle service.

The QRTC site is one of the few mainline linked rail testing sites in the UK, and hosts a cluster of rail related companies, including Viva Rail.

 

Coleshill-based property developer IM Properties has invested in Leamington town centre. The company bought blocks in The Parade and Warwick Street, opposite the entrance to the Royal Priors Shopping Centre, and a further site in Guy Street.

Asset manager Harry Goodman, quoted in Business Insider, said: "The town centre has been on our radar for a while. It's an affluent town, with an appealing mix of major national retail brands and independent boutiques.

"We see a lot of opportunity to add further value and character to the assets. We're already in talks with some really strong and exciting new operators, who are looking to take up the small amount of vacant space available.

"The retailers have confidence in the spa town too. The Card Factory and Greggs have both had their leases extended by a further ten years, and we have also recently completed a letting to Coffee #1 on Warwick Street."

 

Nuneaton town centre regeneration received a boost as a prominent site, close to the main library, was sold to high end assisted living provider McCarthy & Stone. The company's website says: “The group has a proven business model of buying land, securing detailed planning consent and then building, selling and managing high-quality developments across the UK that are specifically designed to meet the lifestyle needs of older people.”

 

High end furniture developer Vitsoe continued to make progress on its new HQ and manufacturing site at Leamington Spa, which is being relocated from London.

The company manufactures and sells worldwide the visionary designs created by German designer Dieter Rams from the 1960s.

 

Warwick Manufacturing Group, at the University of Warwick, released information about its planned new Battery Prototyping Centre, which it is seeking public funding to develop.

The new centre seeks to further develop Coventry & Warwickshire’s low carbon vehicle R&D infrastructure, strengthening the area’s status as the leading centre for battery research in the UK.

 

Napton-based Lontra, developers of revolutionary compressor technology, were recognised globally as the only UK finalists in the European Inventor Awards 2017.

The company was shortlisted in the “Small and Medium-Sized Enterprises” category and was the only UK finalist in the prestigious Awards ran by the European Patent Office. The winner of the annual innovation prize was announced at the ceremony in Venice on June 15th.

 

Two Warwickshire companies received support from the University of Warwick Science Park and Warwickshire County Council through the Business Ready Programme.

Guthrie Douglas, which makes tension blind systems in Warwick, secured £35,000 to invest in new machinery. The move will support its aim to double turnover in the next four years and bring its headcount to 20 staff.

Rugby-based furniture maker NEJ Stevenson also secured £35,000 to extend its base in Church Lawford. The business, which has a Royal Warrant and has made pieces for the Duke and Duchess of Cambridge, will also buy new machinery.

Neil Stevenson, of NEJ Stevenson, said: "It’s simply stunning to get this level of support. To be perfectly honest, we’d given up on grants because over the years we have applied and have found it very difficult or just didn’t qualify.

"What we do requires a high level of skill and craftsmanship but there isn’t a huge amount of margin in each commission so this support will mean we can expand, which has to be good for the local economy."

Janette Pallas, of Business Ready, added: "Guthrie Douglas and NEJ Stevenson are great examples of some of the high-end, high-quality manufacturing going on Warwickshire. They supply to everyone from royalty to museums and are renowned for the quality of their manufacturing.

“It is great to hear that both found the process of applying for the grants through Warwickshire County Council straight forward and that it will have a positive impact on their growth, on jobs and the economy of the region."

 

Warwickshire County Council and crowdfunding platform Spacehive launched a new collaboration, with the county council providing a new £134,000 capital fund to support civic projects in Warwickshire’s Towns, ia the online platform.

The crowdfunding platform can be used to encourage town centre communities to generate and fund civic initiatives that they would like to see in their town centres.

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