How is Hertfordshire performing?
The following synopsis gives a broad overview of the key findings in our latest Hertfordshire Economic Outlook and Skills and Labour Market Update (revised March 2016).
Some of the challenges and issues raised will be reflected in our refreshed Strategic Economic Plan following wide consultation.
Read the Message from our new LEP chair, Mark Bretton, which sets out some of our successes to date and the platform to build on.
• UK-wide economic growth has slowed, affecting Hertfordshire’s performance in particular.
At 3.2%, our annualised economic growth rate is 0.6% below the national average.
• Hertfordshire has seen high levels of population growth in the last ten years.
The rate of population growth was 10.3% between 2004 and 2014. This is likely to slow over the next ten years, but we expect it to remain higher than the national average.
• Hertfordshire’s longer term productivity performance has been sluggish but recent results point to a positive change in performance.
Between 2005 and 2013, Hertfordshire had the second lowest growth rate among LEPs. However, the measure of productivity (Gross Value Added per hour worked) bounced back strongly in 2013 to record the highest level of productivity growth since 2005. GVA is a good indicator of the amount of wealth generated within the economy over time, and can therefore help us to determine where investments in economic activity may have had a positive impact.
Enterprise, Innovation and Industries
• Entrepreneurship rates continue to rise and are among the highest in the UK.
Over the past ten years, the business population in Hertfordshire has increased, on average, by about 2.4% a year compared with 1.37% nationally.
• Survivability rates are slightly above average but new firm growth lags behind many other LEP areas.
Hertfordshire ranks 16th of 39 LEPs for the one-year survival rate of businesses started in 2013, though the rate is a little above the national average. However, only 5.5% of 2011 start-ups reached £1m turnover by 2014 compared to 6.4% nationally. Furthermore, 15.7% of businesses experienced employment growth of 20% or more – slightly lower than the national average of 16%. In addition, a lower share of firms born in 2011 achieved turnover of £3m by 2014, compared to the national average.
• Employment in knowledge-based industries is growing.
Hertfordshire has become a strong provider of employment in a variety of sectors including professional, scientific & technical; information & communication; wholesale & retail; and construction. We have also seen significant growth in accommodation & food services; and administrative & support services. Overall, the employment is knowledge-based industries grew at double the national rate between 2009 and 2014.
Skills and the labour market
• Job growth in Hertfordshire continues to be one of the highest in England.
In 2013, jobs in Hertfordshire grew by 3.1%, compared to 1.8% in England as a whole. Workplace earnings in Hertfordshire have increased by 2.9%, and earnings in the country are 6% higher than the national average. Unemployment as a whole continues to fall, and has remained consistently below the national average, reaching its lowest rate of 3.5% of working-age people in 2015.
• Our population is becoming highly skilled.
In the county 43.5% of working-age adults possess degree-level qualifications – well above the national average. Young people are succeeding too: in 2014, 66% of 19 year olds had attained A-level equivalent qualifications. However, while GCSE-level achievement remains high, the amount of pupils gaining at least 5 A* GCSEs fell by 1.4% in 2014/15 to the lowest rate since 2009/10, whilst improving across the rest of the nation.
• Hertfordshire’s ‘skills gap’ is decreasing.
In 2015, 27.9% of vacancies in Hertfordshire were hard to fill, lowered from 31.1% in 2013. Overall the number of hard to fill vacancies that are a direct result of skills shortages in the workplace has reduced by 15.6% from 2013 to 2015.