Norwich Economic Barometer April 2017

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Contents

BUSINESS NEWS ....................................................................................................................... 2

ECONOMY ................................................................................................................................. 2

BUSINESS ................................................................................................................................. 5

EDUCATION ............................................................................................................................... 6

CLAIMANT COUNT UNEMPLOYMENT .................................................................................... 8

WARD LEVEL CLAIMANT COUNT UNEMPLOYMENT ........................................................... 9

CLAIMANT COUNT UNEMPLOYMENT: AGE/DURATION .................................................... 10

HOUSING BENEFIT.................................................................................................................. 12

16-18 YEARS OLDS NOT IN EDUCATION, EMPLOYMENT OR TRAINING (NEET) ............ 12

AVERAGE HOUSE PRICES ..................................................................................................... 13

APPENDIX ................................................................................................................................ 14

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Business news

Economy

The UK's inflation rate (CPI) rose last month to its highest since September 2013, shown in

Figure 1. Inflation now stands at 2.7 per cent up from 2.3 per cent in March - and above the

Bank of England's 2 per cent target. The main reason was higher air fares, which rose

because of the later date of Easter this year compared with 2016. Rising prices for clothing,

vehicle excise duty and electricity also played a part, but a fall in the price of petrol and

diesel slightly offset this. The Retail Prices Index (RPI), a separate measure of inflation

which includes council tax and mortgage interest payments, reached 3.5 per cent last month,

up from 3.1 per cent in March. The ONS's new preferred inflation measure of CPIH, which

contains a measure of housing costs, rose to 2.6 per cent from 2.3 per cent in March.

Figure 1 UK Inflation Rate

UK construction companies reported a solid start to the second quarter of 2017, helped by

faster rises in civil engineering and residential building activity. April data also pointed to the

strongest upturn in incoming new work so far this year, which survey respondents linked to

the resilient economic backdrop and a sustained improvement in client demand. Greater

workloads underpinned a further increase in employment numbers and the most marked rise

in input buying since November 2016. Meanwhile, robust demand for construction materials

and upward pressure on costs from sterling depreciation resulted in another steep increase

in input prices during April. At 53.1, up from 52.2 in March, the seasonally adjusted

Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) pointed to a solid rise in

overall construction output as shown in Figure 2. The latest reading was well below the post-

crisis peak seen in January 2014 (64.6), but still signalled the sharpest rate of expansion so

far this year. Civil engineering was the best performing sub-category of construction activity

in April, with the rate of expansion the fastest since March 2016. Growth of residential

building also accelerated, reaching a four-month high. Commercial building work increased

only slightly and at a weaker pace than in March.

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Figure 2 Markit/CIPS Construction PMI

Figure 3 Markit/CIPS Manufacturing PMI

Figure 3 shows that the start of the second quarter saw a solid improvement in the

performance of the UK manufacturing sector. Rates of expansion in output, total new orders

and new export work all gathered pace, underpinned by robust business confidence and

driving further job creation. The seasonally adjusted Markit/CIPS Purchasing Managers’

Index (PMI) rose to a three-year high of 57.3 in April, up from March’s four-month low of

54.2. The PMI has signalled expansion for nine months in a row. The last time the PMI

registered below its no-change mark was July 2016, the month following the EU referendum

result. The April PMI reflected positive influences from all five of its sub-components.

Alongside the growth of output, new orders and employment, stocks of purchases also rose

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at a survey record rate and suppliers’ delivery times lengthened. Manufacturing production

expanded at the fastest pace in three months. The strongest growth was seen in the

investment goods sector, followed by the intermediate goods category.

Figure 4 Markit/CIPS Services PMI

UK service providers experienced a sustained rebound in business activity during April,

supported by the fastest upturn in new work so far in 2017 summarised in Figure 4. Job

creation also picked up to a four-month high, driven by renewed pressures on operating

capacity. A strong pace of input cost inflation persisted in April, which contributed to the

steepest rise in prices charged by service sector firms since July 2008. Meanwhile, service

providers are confident about their prospects for growth over the year ahead, but the degree

of optimism moderated for the third month running to its weakest since November 2016. At

55.8 in April, up from 55.0 in March, the headline PMI posted above the 50.0 no-change

threshold for the ninth month in a row. The latest reading revealed the fastest upturn in

service sector output since December 2016. The robust and accelerated rise in services

activity was linked to resilient business-to-business demand, new product launches and, in

some cases, another rise in sales to overseas clients.

Warmer weather helped retail sales to rise by more than expected last month, according to

ONS data. Sales volumes jumped 2.3 per cent in April from the month before and were 4 per

cent higher than a year earlier. April's rebound contrasted with March, when sales saw the

biggest fall in seven years. ONS reported anecdotal evidence from retailers which suggested

that good weather contributed to growth. The stronger-than-expected rise in sales pushed

the value of the pound above $1.30 to its highest level since September last year

Some 37 per cent of firms in the East of England are dissatisfied with the state of the

region's infrastructure, and 34 per cent believe further devolution would improve it, according

to a CBI report, Shaping Regional Infrastructure. Priorities include better rail connections

with London and the South East, a coherent agenda for planning and delivery and improved

access to international markets with better links to Stansted. The CBI’s East of England

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director, said: “Infrastructure is a key driver of productivity. By making it easier for staff to get

to work and by better connecting companies to their customers, markets overseas and

supply chains, we could do a great deal to lift England’s productivity”.

Firms in the region remain confident that they will raise output in the year ahead as

investment plans, new contracts, and the launch of new products and promotions

highlight their optimism, according to the Lloyds Bank regional PMI for the East of

England. Although business activity in the region grew at a slightly slower rate in

April, it was above the national average and job creation increased. The index

dipped to 57.3 from 58 in March but remained well above the 50 level which denotes

growth. Firms recruited extra staff to cope with greater workloads from new orders

although inflationary pressures mounted, with increases in petrol and labour costs.

Business

The Feed has received £10,000 in matched funding from Santander’s Changemaker Fund

after a crowdfunding campaign. The Feed, part of the charity LEAP, is a catering company

helping vulnerable and socially excluded members of the community to get into work,

develop themselves, gain work experience and improve self-confidence. Through the

Changemaker Fund The Feed have been able to take a stall on Norwich market, which will

enable clients to experience working in a customer-facing operation.

The name of the Norwich and Peterborough Building Society will have disappeared from the

region’s high streets by December. Its owners Yorkshire Building Society have today

confirmed the closure schedule for the 28 branches across Norfolk, Suffolk and

Cambridgeshire, which will come with the loss of 136 jobs. The N&P closures will be

completed in four tranches, from September to December, in order to give customers time to

switch to other providers, the group said.

Norwich-based tech company, Proxama, has scrapped plans to sell its digital payments

division and will instead carry out a million-pound restructure. The company, which is

headquartered in Surrey Street, has ended the sales process and decided it “is more

suitable to extract value from long-term contracted revenue agreements”. Chief executive

John Kennedy said there would be no material change to the business in Norwich, with the

digital payment side of the business primarily based in London. Proxama also has offices in

London and New York and employs around 30 in Norwich and 61 overall. Proxama’s AIM

share price fell by about 28 per cent on the news.

Norwich Business Improvement District has laid out its new five-year plan and has issued a

call to arms for businesses to back its new five-year plan in a vote which will determine

whether it gets the go-ahead for a second term. Goals within its three areas of focus –

promotion, visitor experience and business concerns – include securing Purple Flag

accreditation for evening and night time economy hubs like Prince of Wales Road, lobbying

Norfolk County Council for highways improvements including to the city ring road, and

continuing the successful VisitNorwich app and the City Hosts scheme. The new Norwich

BID plan, will cover an area more than twice the size of the previous five-year plan, following

the ring road from County Hall to Anglia Square and St Stephens Street to Kett’s Hill.

Community schemes which have helped hundreds of disadvantaged people in the East into

a job or to become ready to work can expand their programmes with an extra £75,000 from

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New Anglia LEP. Three organisations, which were granted £20,000 each through the

Community Challenge Fund in 2016, will now benefit from £25,000 each in follow-up

funding. They are Action Community Enterprises, Norwich - ‘Worksense’; Purfleet Trust,

King’s Lynn – ‘Learn2Earn’ and Headway Suffolk.

Two Norwich pubs have received awards from the Norfolk branch of the Campaign for Real

Ale (CAMRA). Norfolk members of CAMRA have selected The Kings Head, in Magdalen

Street, Norwich, as their 2017 Norfolk Pub of the Year while The White Lion in Oak Street,

Norwich, was voted Cider Pub of the Year – for the sixth time.

Education

The University of East Anglia (UEA) has risen two places to 12th position in the prestigious

Complete University Guide league table, its highest-ever national ranking. The Guide, which

measures 129 UK universities across 10 categories, also ranks 70 subjects, with UEA

appearing in the top 10 for nine of the 35 subjects it teaches. Physiotherapy is ranked third in

the subject tables, with Anatomy & Physiology fourth, American Studies fifth and Aural &

Oral Sciences sixth. Other subjects in the top 10 include Creative Writing (eighth),

Communications and Media (10th), Drama (10th), Marketing (10th) and Nursing (10th).

In addition, the UEA has reached 18th place in the highly-respected Guardian University

Guide 2018, rising six places into the top 20. The prestigious Guardian University Guide

ranks UK universities in a range of categories including teaching, student-staff ratios, entry

tariffs and career prospects. Six of the University’s subjects feature in their respective top

ten, including American Studies in second, and Accounting and Finance in sixth. Nursing

and Midwifery, History of Art and Law are all seventh in their categories, with Earth and

Marine Science in 10th place.

The Enterprise Centre at the UEA has increased its awards total to 22 since opening two

years ago, by winning the "Design Through Innovation" Royal Institute of Chartered

Surveyors (RICS) East of England Award. Regarded as the premier property and

construction awards in the country, the judges singled out The Enterprise Centre for its

“innovative approach” and said that “At each and every stage the client and delivery team

have questioned how things can be done differently and be improved upon. This approach

has attracted a great deal of attention, from both the UK construction industry and overseas,

setting a new precedent for sustainable design and proving that innovation need not limit

architectural achievement.”

The Adapt Low Carbon Innovation Fund (LCIF) - the only venture capital fund run by a

university with the purpose of supporting businesses from a range of sectors who produce

products and services that reduce carbon emissions - is launching its second investment

cycle on 3 May. The fund has already invested £20.5 million, alongside £49 million from

other investors, in more than 40 enterprises since it was set up in 2010 – saving a projected

10 million tonnes of carbon by 2020. The fund is aimed at small to medium-sized businesses

based in the East of England (Norfolk, Suffolk, Cambridgeshire, Bedfordshire, Essex and

Hertfordshire), who can apply for an investment of £25,000 to £75,000, with matching co-

investment.

More than 500 Year 10 pupils from 35 schools across Norfolk and north Suffolk have visited

the University of East Anglia (UEA) for the annual “Move On Up” event, aimed at

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encouraging young people who might not have higher education on their radar to continue

their studies after sixth form. This is the initiative’s tenth year, and it’s expanded considerably

over that time to include a large range of academic and practical sessions giving young

people a taste of what university offers. In addition to UEA, these sessions were run by

Norwich University of the Arts, Anglia Ruskin University, the University of Suffolk, Easton &

Otley College and the College of West Anglia

A newly re-launched actuarial sciences course at the UEA has been recognised by the UK’s

only chartered professional body dedicated to educating and regulating actuaries in the UK

and internationally. The School of Computing Sciences and the Actuarial Science Group at

UEA have announced the launch of their revised BSc Actuarial Sciences programme from

September 2017. This follows the recent success of the revised programme in being re-

awarded accreditation from the Institute and Faculty of Actuaries (IFoA)

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Claimant count unemployment

The “claimant count” measure counts the number of people claiming Jobseeker's Allowance

plus those who claim Universal Credit and are required to seek work and be available for

work and replaces the number of people claiming Jobseeker's Allowance as the headline

indicator of the number of people claiming benefits principally for the reason of being

unemployed. Figure 5 shows the trend in claimant count unemployment since 2014. Rates

have fallen noticeably since the beginning of the period. The rate in the Norwich City

Council area started the period significantly above the national, regional, New Anglia LEP

and the Norwich urban area rates. During the past year the gap narrowed and again, this

month the Norwich rate has remained below the national rate. However, the rate has begun

to increase.

Figure 5 Claimant count unemployment 2014 to 2017

Table 1 Claimant count rate unemployment

April 2016

March 2017

April 2017

Monthly change

Annual change

Great Britain 756,140 1.9% 2.0% 789,470 796,110 2.0%

0 + 0.1%

East of England

48,260 1.3% 1.4% 51,520 51,755 1.4% 0 + 0.1%

New Anglia LEP

12,685 1.3% 1.6% 15,265 15,320 1.6% 0 + 0.3%

Norwich City Council area

i

1,775 1.9% 1.9% 1,785 1,800 1.9% 0 0

Norwich urban area

ii

2,170 1.5% 1.5% 2,205 2,230 1.5% 0 0

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Table 1 shows that the each of the areas saw an increase in claimant count unemployment

rates over the year except the two Norwich areas where there was no change. Compared

to March, the rates also increased in each of the reported areas except the urban area

where it was unchanged.

Ward level Claimant count unemployment

Table 2 Claimant count unemployment

April 2016

March 2017

April 2017

Monthly change

Annual change

Bowthorpe 125 1.6% 145 1.8% 155 1.9%

+ 0.1% + 0.3%

Catton Grove 175 2.4% 170 2.4% 175 2.4%

+ 0.1% 0

Crome 125 2.1% 125 2.1% 140 2.4%

+ 0.3% + 0.3%

Eaton 45 0.9% 30 0.6% 30 0.6%

0 - 0.3%

Lakenham 125 2.2% 120 2.1% 120 2.1%

0 - 0.1%

Mancroft 245 3.2% 275 3.6% 275 3.6%

0 + 0.4%

Mile Cross 225 3.1% 225 3.2% 230 3.2%

0 + 0.1%

Nelson 55 0.8% 60 0.8% 55 0.8%

0 0

Sewell 115 1.6% 110 1.5% 110 1.5%

0 - 0.1%

Thorpe Hamlet

180 2.0% 185 2.1% 185 2.1% 0 + 0.1%

Town Close 100 1.3% 100 1.3% 100 1.3%

0 0

University 65 0.8% 65 0.8% 65 0.7%

- 0.1% - 0.1%

Wensum 185 2.3% 175 2.2% 165 2.1%

- 0.1% - 0.2%

Compared to this time last year, unemployment rates fell slightly in University and Wensum

wards. Rates in Bowthorpe, Catton Grove and Crome wards saw a marginal increase; all

other ward rates were unchanged.

Over the month, the unemployment rate in Eaton, Lakenham, Sewell, University and

Wensum wards saw a marginal fall; the rate in Catton Grove, Nelson and Town Close was

unchanged, all the other wards saw a slight increase in rates.

Figure 6 demonstrates that the wide variation in ward JSA rates across the city council area

is clearly evident. The differential between the lowest (Eaton) and the highest (Mancroft)

rates currently stands at 3 percentage points.

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Figure 6 Norwich wards JSA unemployment 2014 to 2017

Claimant count unemployment: age/duration

Gender: in the city council area, one in every three (33 per cent) out-of-work claimants is a

woman. Over the month, female rates remained the same across the Norwich area (1.3

per cent), the LEP area (1.1 per cent) and regionally (1 per cent) but increased slightly at

the national level (1.5 per cent).

The male unemployment rate is higher in Norwich (at 2.5 per cent of working age males)

than in the LEP area (2.0 per cent), regionally (1.7 per cent) and nationally (2.5 per cent).

Over the month, rates remained the same across each reported area.

Norwich’s male unemployment rate has remained higher than rates in the LEP area and at

the regional and national levels since records began in 1992. However, the current male

claimant count rate in Norwich is one of the lowest ever recorded and is on par with the

national rate.

It is likely that Norwich’s relatively high levels of male unemployment can be attributed to

the steady loss of manufacturing jobs and the dominance of the service sector in Norwich.

Duration: a certain amount of churn is expected within the labour market as people move

between unemployment, welfare benefits and employment. In Norwich 61.3 per cent of

JSAiii unemployment claims are for a period of less than six months; higher than the

proportion seen across the LEP area (55.8 per cent, nationally (53.4 per cent) and

regionally (60.1 per cent).

The percentage of JSA claimants who are recorded as being unemployed for more than 12

months stands at 27.3 per cent in Norwich compared to 31.7 per cent in the LEP area; 25.6

per cent regionally and 31 per cent nationally. Relative to the previous month, the

percentage of long-term unemployed has increased slightly across the LEP area and

regionally; at the national level it remained the same and Norwich saw a marginal fall.

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It is widely recognised that long periods of unemployment make it increasingly difficult for

affected individuals to find work, particularly in a weak labour market. Over the year, the

number of people recorded as long term unemployed in Norwich has fallen from 385 people

in April 2016 to 320 currently.

Age: As a percentage of the 18-24 year old age group, the Claimant Count rate stands at

1.7 per cent in Norwich; 2.1 in the LEP area; 2.0 per cent regionally and 2.4 per cent

nationally.

Figure 7 Claimant Count unemployment 2014 to 2017 for 18-24 year olds

Movement in the unemployment rate over the period 2014 to 2017 is summarised in Figure

6.

Lakenham, Thorpe Hamlet, Wensum, Catton Grove, Crome, Mile Cross and Mancroft

wards have proportions of claimants aged 18-24 years above that of the Norwich average.

Mancroft ward has the highest number of claimants aged between 18-24 years (20).

At the other end of the age scale, Norwich has a higher rate of unemployment claimants

aged 50 years and older (2.1 per cent, 425 people) compared to the LEP area (1.2 per

cent) and regionally (1.2 per cent) and nationally (1.7 per cent).

Against the previous month, the unemployment rate of those aged 50 years or more

remained the same across each of the reported areas except across the LEP area which

saw a marginal fall.

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Housing benefit

Many housing benefit claimants are pensioners, people with disabilities, carers or people

who are in low waged work. It should be noted that resident earnings in Norwich are

relatively low and this will be a contributing factor to the number of people claiming housing

benefit.

Housing benefit is an income related benefit designed to help people on low incomes pay

for rented accommodation whether in, or out, of work.

Table 3 shows that the number of housing benefit claimants in the Norwich local authority

area fell by 91 claims during April. Over the year, housing benefit claims in Norwich have

fallen by 2.2 per cent. Comparable national data is not available because of a time lag in

data collection.

Table 3 Norwich City Council housing benefitiv claimants

Number of claimants Monthly change

April 2016 17,103 - 151 (- 0.9%)

May 2016 17,278 + 175 (+ 1.0%)

June 2016 17,287 + 9 (+ 0.05%)

July 2016 17,213 - 74 (- 0.4%)

August 2016 17,228 + 15 (+ 0.08%)

September 2016 17,138 - 90 (- 0.5%)

October 2016 17,022 - 116 ( - 0.7%)

November 2016 16,954 - 68 ( - 0.3%)

December 2016 16,948 - 6 (- 0.03%)

January 2017 16,884 - 64 (- 0.3%)

February 2017 16,871 - 13 (0.07%)

March 2017 16,811 - 60 (- 0.3%)

April 2017 16,720 - 91 (- 0.5%)

Young people (16-18 years) recorded as Not in

Education, Employment or Training (NEET)

The latest update (November 2016) received from Norfolk County Council is that Norwich’s NEET

figure stands at 6.1 per cent compared to 3.8 per cent at the county level.

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Average house prices

Figure 8 HM Land Registry average house prices 2014-17

The House Price Index produced by HM Land Registry is the most accurate and independent house

price index available for England. According to HM Land Registry’s House Price Index (Crown

copyright) over the year, average house prices increased by 7.4 per cent in Norwich and 6.3 per

cent across England. Figure 7 summarises average house price movements since January 2014.

During the month of March, average house prices grew by 1.5 per cent in Norwich and fell by 0.6

per cent in England compared to the previous month. The average house price in Norwich currently

stands at £195.590 against £232,530 for England.

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Appendix Contact details

Sharon Quantrell, Economic Development, Norwich City Council,

e: sharonquantrell@norwich.gov.uk

Data Sources:

Figure 1: UK Inflation Rate ONS

Figure 2: Markit/CIPS UK Construction Purchasing Managers’ Index

Figure 3: Markit/CIPS UK Manufacturing Purchasing Managers’ Index

Figure 4: Markit/CIPS UK Services Purchasing Managers’ Index

Figure 5: Claimant count – NOMIS, Crown copyright

Figure 6: Ward unemployment – NOMIS, Crown copyright

Figure 7: Claimant count 18-24 year olds – NOMIS, Crown copyright

Figure 8: House Price Index, HM Land Registry, Crown copyright

Tables 1 and 2: Claimant count – NOMIS, Crown copyright

Table 3: Housing benefit claimants - Norwich City Council

News stories from a variety of sources including EDP/Evening News; Business in East Anglia; Office of National Statistics; Reuters; BBC; Markit/CIPS PMI; Markit Monthly Economic Overview: University of East Anglia; Norwich University of the Arts, City College Norwich.

i The Norwich City council area comprises the following wards: Bowthorpe, Catton Grove, Crome, Eaton,

Lakenham, Mancroft, Mile Cross, Nelson, Sewell, Thorpe Hamlet, Town Close, University, Wensum

ii The Norwich urban area comprises the following wards: Drayton North, Drayton South, Hellesdon North

West, Hellesdon South East, Old Catton and Sprowston West, Sprowston Central, Sprowston East, Taverham

North, Taverham South, Thorpe St Andrew North West, Thorpe St Andrew South East, Bowthorpe, Catton

Grove, Crome, Eaton, Lakenham, Mancroft, Mile Cross, Nelson, Sewell, Thorpe Hamlet, Town Close,

University, Wensum, Cringleford, New Costessey, Old Costessey,

iii Claimant count data not yet available by duration

ivHousing benefit numbers include people who are claiming council tax benefit only