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London’s Economy Today
Issue 164 | April 2016
UK GDP continues to grow
In this issue
UK GDP continues to
grow..................................1
Latest news.......................1
Economic indicators..........5
Socio-economic baseline –
Old Oak and Park Royal....9
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By Gordon Douglass, Supervisory Economist, and Emma Christie, Economist
New data for the UK economy published by the Office for
National Statistics (ONS) in April shows that economic
growth slowed in the first quarter of 2016. Thus the
preliminary estimates of GDP showed that economic growth
decreased to 0.4 per cent for the quarter, down from 0.6 per
cent in the fourth quarter of 2015 (see Figure 1). Compared
to a year ago, GDP growth remained flat at 2.1 per cent in
the first quarter of 2016.
The growth in GDP was driven by output increasing in services by 0.6 per cent,
slowing from 0.8 per cent in the final quarter of 2015. Services contributed 0.5
percentage points to GDP growth which was offset by falls in other sectors. Business
services and finance – a particularly important industry for London – grew by 0.3
per cent in Q1 2016 after growing by 0.7 per cent in the previous quarter. The ONS
noted that growth in business services and finance “was the main reason behind the
reduction in services growth between the 2 quarters”.
UK productivity drops at the end of 2015
Despite the UK economy continuing to grow over the end of 2015 and into 2016,
other measures of the UK’s economic performance were less optimistic. For example,
in April the ONS published estimates that showed that “UK labour productivity as
Latest news...
Regional, sub-regional and local GVA estimates for London, 1997-2014
Current Issues Note 46
This note shows that in 2014, London’s total nominal GVA (as measured by GVA (I) ) was
over £364 billion (up 6.8 per cent on 2013), helped by strong growth in real estate (12.8 per
cent) and finance and insurance activities (11.6 per cent). Inner London accounts for 68 per
cent of London’s GVA, with Inner London – West alone accounting for 42 per cent of the
total.
Download the full report.
8
6
2
4
2
0
-2
-4
-6
year-on-year % change
2016 Q1
2014 Q3
2013 Q1
2011 Q3
2010 Q1
2008 Q3
2007 Q1
2005 Q3
2004 Q1
2002 Q3
2001 Q1
1999 Q3
1998 Q1
1996 Q3
1995 Q1
1993 Q3
1992 Q1
1990 Q3
1989 Q1
1987 Q3
1986 Q1
1984 Q3
1983 Q1
1981 Q3
1980 Q1
1978 Q3
1977 Q1
-8
1975 Q3
% change on previous quarter
measured by output per hour fell by 1.2 per cent from the third to the fourth
calendar quarter of 2015 and was some 14 per cent below an extrapolation
based on its pre-downturn trend”. They further observed that “in Quarter 4
2015 output per hour fell by 1.2 per cent, the largest quarter on quarter fall
since Quarter 4 2008. This decline primarily reflects a sharp quarterly increase
in hours worked”. This poor productivity growth may have impacts on both
household incomes and government revenue with the Office for Budget
Responsibility observing in their March 2016 Economic and fiscal outlook
that “lower productivity growth means lower forecasts for labour income and
company profits, and thus also for consumer spending and business investment.
In aggregate, this reduces tax receipts significantly”.
World growth forecast to slow
The international economy also remains weak with the International Monetary
Fund (IMF) downgrading their expectations for growth in their latest World
Economic Outlook, which they published in April. They now forecast world
output to increase by 3.2 per cent in 2016 and 3.5 per cent in 2017 (downgrades
of 0.2 and 0.1 per cent respectively). Forecasts were downgraded for a number
of countries. Thus the US is now forecast to grow by 2.4 per cent this year and
2.5 per cent next year (downgrades of 0.2 per cent on 2016 and 0.1 per cent on
2017), while the Eurozone is forecast to grow by 1.5 per cent this year and 1.6
per cent next year (likewise downgrades of 0.2 and 0.1 per cent respectively).
For the UK the IMF now forecasts growth of 1.9 per cent in 2016 (a 0.3 per cent
downgrade on their previous forecast) and 2.2 per cent in 2017 (unchanged on
their previous forecast). The IMF also warned in April in their latest Financial
Stability Report that there is a “growing concern about a mutually reinforcing
dynamic of weak growth and low inflation that could produce sustained
economic and financial weakness”.
More widely there was further evidence of a slowdown, although continued
growth, in China’s economy with data for economic growth in the first quarter
of 2016 showing that the economy grew by an annualised rate of 6.7 per cent
compared to growth of 6.8 per cent in the final quarter of 2015. And in the
United States the minutes from the Federal Reserve’s Federal Open Market
Committee’s meeting in March showed that the key factor in their decision not
London’s Economy Today | Issue 164
Source: ONS
%
1974 Q1
Figure 1: UK GDP
Growth
Last data point is Q1 2016
to raise US interest rates was the state of the global economy. The minutes thus
observed that some members “judged that the headwinds restraining growth
and holding down the neutral rate of interest were likely to subside only slowly”.
Elsewhere there were signs that the problems in the Eurozone have yet to be
fully tackled. It was announced in April that, in order to address concerns about
the stability of Italy’s banking system, Italy’s strongest banks, insurers and asset
managers had agreed a €5 billion bailout fund, called Atlante, to support weaker
lenders should they need it.
3
UK growth forecast downgraded as surveys show success
and challenges for London
In the UK the economic picture remains mixed. UK car sales hit almost 519,000
in March, their highest monthly figure since 1999 according to Society of
Motor Manufacturers and Traders data. While UK consumer price index (CPI)
inflation reached 0.5 per cent in March, still well below the Bank of England’s
central symmetrical target of 2 per cent but higher than the 0.3 per cent seen in
February and its highest level since December 2014 (see Figure 2).
5
4
3
2
1
0
Jul-15
Jul-14
Jan-15
Jul-13
Jan-14
Jul-12
Jan-13
Jul-11
Jan-12
Jul-10
Jan-11
Jul-09
Jan-10
Jul-08
Jan-09
Jul-07
Jan-08
Jul-06
Jan-07
Jul-05
Jan-06
Jul-04
Jan-05
Jul-03
Jan-04
Jul-02
Jan-03
Jul-01
Jan-02
Jul-00
Jan-01
Jul-99
Jan-00
Jul-98
Jan-99
Jul-97
-1
Jan-98
CPI
However, the April 2016 update to the Bank of England’s Agents’ summary of
business conditions found that “annual output growth had been unchanged
on the month. Investment growth intentions had weakened a little, mostly
reflecting increased uncertainty”. And on the property market they noted that
“housing market activity had risen due to increased purchases of properties by
buy-to-let investors ahead of April’s stamp duty changes. In contrast, investor
demand for commercial real estate had slowed, particularly in London”. Worries
also persist for the growth prospects of the UK economy with not only the
IMF reducing their economic forecast recently. Thus the British Chamber of
Commerce published their latest forecast for UK economic growth in April in
which they now expect growth of 2.2 per cent in 2016 and 2.3 per cent in 2017,
compared to a previous forecast of growth of 2.5 per cent in both 2016 and
2017. They observed that “the downgrading of our forecast is due to weaker
than previously expected growth across all areas of the economy: manufacturing,
services, net exports & household consumption”. Evidence of the continuing
pressure on public finances also came to light in April with the ONS publishing
London’s Economy Today | Issue 164
Source: ONS
6
%
Jan-97
Figure 2: UK annual CPI
inflation rate
Last data point is March
2016
public sector net borrowing data for 2015/16 showing that annual borrowing
stood at £74 billion, £1.8 billion higher than forecast at the time of the March
Budget.
Also the continuing pressures on the high street were highlighted by BHS going
into administration on 25 April threatening their 164 stores in the UK (16 of
which are in London) and 11,000 employee jobs. Austin Reed which has four
retail outlets in London also went into administration in April.
4
In London the London Chamber of Commerce and Industry Q1 2016 Capital 500
survey found that “domestic demand continued to improve during Q1 2016.
On balance, 11 per cent of London businesses reported increased sales, up 2
points on last quarter”. However, “after stabilising the previous quarter, business
confidence levels dipped by 7 points, as only 17 per cent of companies, on
balance, expected their firm’s performance to improve over the next 12 months
- an all-time Capital 500 low, compared to a high of 32 per cent in Q2 2014”.
Surveyed firms put the economic outlook at its “lowest recorded level for two
years, [as] expectations for the UK and London economy continued to decline”.
Still the latest Z/Yen Global Financial Centres Index found that “London remains
just ahead of New York to retain the number one position”, adding that along
with Singapore and Hong Kong they “remain the four leading global financial
centres”.
London’s Economy Today | Issue 164
A slowing global economy and increased uncertainty provides challenges to
London. Nevertheless, despite these challenges the economic fundamentals
in London and indicators of current activity provide room for optimism for
London’s economic prospects for the time ahead.
Economic indicators
Increase in average number of
passenger journey
The most recent 28-day period covered 7 February
2016 – 5 March 2016. Adjusted for odd days,
London’s Underground and buses had 285.4 million
passenger journeys; 176.1 million by bus and 109.3
million by Underground.
The 12-month moving average of passengers
increased to 282.5 million, from 282.2 million in
the previous period. The moving average for buses
was 179.0 million. The moving average for the
Underground was 103.5 million.
The methodology used to calculate the number of bus
passenger journeys was changed by TfL from 1 April
2007. For a detailed explanation please see LET issue
58 (June 2007).
Passenger numbers
journeys (millions) adjusted for odd days
millions
220
5
200
180
160
140
120
100
80
60
2015/16
2014/15
2013/14
2012/13
2011/12
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1995/96
1994/95
1993/94
1992/93
40
London Underground
Bus (pre 1 April '07 method)
Bus (new method)
London Underground moving average
Bus moving average (pre 1 April '07 method)
Bus moving average (new method)
Latest release: April 2016
Next release: May 2016
Source: Transport for London
No change in the average annual growth
rate of passengers
Annual % change in passengers using London Underground and buses
adjusted for odd days
%
22
20
18
16
14
12
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
London Underground
Buses
Underground plus bus
London Underground moving average
Buses moving average
2015/16
2014/15
2013/14
2012/13
2011/12
2010/11
2009/10
2008/09
2007/08
2006/07
2005/06
2004/05
2003/04
2002/03
2001/02
2000/01
1999/00
1998/99
1997/98
1996/97
1994/95
Latest release: April 2016
Next release: May 2016
1995/96
The moving average annual rate of growth in
passenger journeys remained at -0.3 per cent.
The moving average annual rate of growth in bus
passenger journey numbers increased to -2.5 per cent
from -2.9 per cent in the previous period.
The moving average annual rate of growth in
Underground passenger journeys decreased to 4.0 per
cent from 4.6 per cent in the previous period.
LU and buses moving average
Source: Transport for London
ILO unemployment increases in London
ILO unemployment rate
all aged 16+, seasonally adjusted
%
Latest release: April 2016
Next release: May 2016
UK
Mar-May 2015
Mar-May 2014
Mar-May 2013
Mar-May 2012
Mar-May 2011
Mar-May 2010
Mar-May 2009
Mar-May 2008
Mar-May 2007
Mar-May 2006
Mar-May 2005
Mar-May 2004
Mar-May 2003
Mar-May 2002
Mar-May 2001
Mar-May 2000
Mar-May 1999
Mar-May 1998
Mar-May 1997
Mar-May 1996
Mar-May 1995
Mar-May 1994
Mar-May 1993
Mar-May 1992
London
London’s Economy Today | Issue 164
16
The ILO unemployment rate in London stood at 6.3
14
per cent in the quarter to February 2016, compared
12
to 6.2 per cent in the quarter to November. In the UK,
10
the unemployment rate was 5.1 per cent in the quarter
to February 2016, showing no change on the previous
8
quarter.
6
There were 291,000 seasonally adjusted unemployed in
4
London in the quarter to February 2016, an increase of
2
3,000 from the quarter to November 2015. There were
0
1,696,000 seasonally adjusted unemployed in the UK
in the quarter to February 2016, an increase of 21,000
from the quarter to November 2015.
From LET Issue 154 (June 2015), GLA Economics now Source: Labour Force Survey - Office for National Statistics
reports on the ILO unemployment rate.
Annual output growth
increases in London in Q3 2015
Real GVA growth in London and the rest of the UK
year-on-year change
%
12
11
London’s annual growth in output
increased to 3.1% in Q3 2015 from 2.4%
in Q2 2015.
Annual output growth in the rest of the
UK decreased to 1.7% in Q3 2015 from
2.2% in Q2 2015.
In Q3 2015, London’s annual output
growth was higher than in the rest of the
UK.
9
8
7
6
5
4
6
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
London
2015 q1
2014 q1
2013 q1
2012 q1
2011 q1
2010 q1
2009 q1
2008 q1
2007 q1
2006 q1
2005 q1
2004 q1
2003 q1
2002 q1
2001 q1
2000 q1
1999 q1
-9
1998 q1
Latest release: March 2016
Next release: June 2016
10
Rest of the UK
Source: Experian Economics
Annual employment growth
slows in London in Q3 2015
Annual house price inflation in
London slows in Q1 2016
 House prices, as measured by
Nationwide, were lower in Q1 2016 than
in Q4 2015 for London, but were higher
in the rest of the UK.
 Annual house price inflation in London
was 11.5 per cent in Q1 2016, down from
12.2 per cent in Q4 2015.
 Annual house price inflation in the UK
was 5.3 per cent in Q1 2016, up from 4.3
per cent in Q4 2015.
Latest release: April 2016
Next release: May 2016
5
4
3
2
1
0
-1
-2
-3
London
2015 q1
2014 q1
2013 q1
2012 q1
2011 q1
2010 q1
2009 q1
2008 q1
2007 q1
2006 q1
2005 q1
2004 q1
2003 q1
2002 q1
2001 q1
2000 q1
1999 q1
1998 q1
-4
Rest of the UK
Source: Experian Economics
House prices, UK and London
year-on-year growth from quarterly figures, seasonally adjusted data
%
40
35
30
25
20
15
10
5
0
-5
-10
-15
-20
London
UK
Source: Nationwide
London’s Economy Today | Issue 164
Latest release: March 2016
Next release: July 2016
%
1989 q1
1989 q3
1990 q1
1990 q3
1991 q1
1991 q3
1992 q1
1992 q3
1993 q1
1993 q3
1994 q1
1994 q3
1995 q1
1995 q3
1996 q1
1996 q3
1997 q1
1997 q3
1998 q1
1998 q3
1999 q1
1999 q3
2000 q1
2000 q3
2001 q1
2001 q3
2002 q1
2002 q3
2003 q1
2003 q3
2004 q1
2004 q3
2005 q1
2005 q3
2006 q1
2006 q3
2007 q1
2007 q3
2008 q1
2008 q3
2009 q1
2009 q3
2010 q1
2010 q3
2011 q1
2011 q3
2012 q1
2012 q3
2013 q1
2013 q3
2014 q1
2014 q3
2015 q1
2015 q3
2016 q1
London’s annual employment growth
decreased to 2.0% in Q3 2015 from a
downwardly revised 2.2% in Q2 2015.
Annual employment growth in the rest
of the UK decreased to 0.5% in Q3 2015
from a downwardly revised 0.7% in Q2
2015.
In Q3 2015, London’s annual
employment growth was higher than in
the rest of the UK as a whole.
Full-time equivalent employment in London and the rest of the UK
year-on-year growth from quarterly figures
London’s business activity
continues to increase
Business activity in London
seasonally adjusted index (50 indicates no change on previous month)
index
70
Firms in London increased their output of
goods and services in March 2016.
The Purchasing Managers’ Index (PMI) of
business activity recorded 54.2 in March
2016, up from 52.2 in February 2016.
An index above 50 indicates an increase
in business activity from the previous
month.
7
60
55
50
45
Jan-97
May-97
Sep-97
Jan-98
May-98
Sep-98
Jan-99
May-99
Sep-99
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
Latest release: April 2016
Next release: May 2016
65
40
London
Source: Markit Economics
New orders in London
seasonally adjusted index (50 indicates no change on previous month)
index
New orders in London rising
70
March 2016 saw an increase in new
orders for London firms.
The PMI for new orders recorded 53.8
in March 2016 compared to 54.7 in
February 2016.
An index above 50 indicates an increase
in new orders from the previous month.
65
60
55
50
45
40
35
Jan-97
May-97
Sep-97
Jan-98
May-98
Sep-98
Jan-99
May-99
Sep-99
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
Latest release: April 2016
Next release: May 2016
London
Source: Markit Economics
Level of employment in London
seasonally adjusted index (50 indicates no change on previous month)
index
The PMI shows that the level of
employment in London firms increased in
March 2016.
The PMI for the level of employment
was 54.6 in March 2016, up from 54.4 in
February 2016.
An index above 50 indicates an increase in
the level of employment from the previous
month.
60
55
50
45
40
35
Jan-97
May-97
Sep-97
Jan-98
May-98
Sep-98
Jan-99
May-99
Sep-99
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-12
May-12
Sep-12
Jan-13
May-13
Sep-13
Jan-14
May-14
Sep-14
Jan-15
May-15
Sep-15
Jan-16
Latest release: April 2016
Next release: May 2016
65
London
Source: Markit Economics
London’s Economy Today | Issue 164
Businesses report higher
employment in March
Surveyors report that house
prices are increasing in London
RICS Housing Market Survey
prices in previous three months; net balance in London and in England and Wales; seasonally adjusted data
100
The RICS Residential Market Survey showed
a positive net balance of -8 for London
house prices over the three months to
March 2016.
Surveyors reported a positive net house
price balance of 42 for England and Wales
over the three months to March 2016.
London’s net house price balance is lower
than that of England and Wales.
80
60
40
20
0
8
-20
-40
-60
-80
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
-100
Latest release: April 2016
Next release: May 2016
London
England and Wales
Source: Royal Institution of Chartered Surveyors
Surveyors expect house prices
to fall in London and to rise in
England and Wales
100
80
60
40
20
0
-20
-40
-60
-80
-100
Jan-00
Apr-00
Jul-00
Oct-00
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Latest release: April 2016
Next release: May 2016
London
Consumer confidence positive in
London and neutral in the UK
30
20
10
0
-10
-20
-30
-40
Greater London
Oct-15
Feb-16
Jun-15
Oct-14
Feb-15
Jun-14
Oct-13
Feb-14
Jun-13
Oct-12
Feb-13
Jun-12
Oct-11
Feb-12
Jun-11
Oct-10
Feb-11
Jun-10
Oct-09
Feb-10
Jun-09
Oct-08
Jun-08
Oct-07
Feb-08
Jun-07
Oct-06
Feb-07
Jun-06
Oct-05
Feb-06
Jun-05
-50
UK
Source: GfK NOP on behalf of the European Commission
London’s Economy Today | Issue 164
Latest release: March 2016
Next release: April 2016
Consumer confidence barometer score
Feb-05
The GfK index of consumer confidence
reflects people’s views on their financial
position and the general economic
situation over the past year, as well as
their expectations for the next 12 months
(including whether now is a good time to
make major purchases). A score below zero
signifies negative views of the economy.
For Greater London, the consumer
confidence score stood at 9 in March 2016,
down from 18 in February 2016.
For the UK, the consumer confidence score
remained at 0 in March 2016, holding
constant from 0 in February 2016.
England and Wales
Source: Royal Institution of Chartered Surveyors
Feb-09
The RICS Residential Market Survey shows
that surveyors expect house prices to fall
over the next three months in London; and
to rise in England and Wales.
The net house price expectations balance in
London was -38 in March 2016.
For England and Wales, the net house
price expectations balance was 17 in March
2016.
RICS Housing Market Survey
house price expectations; net balance in London, and in England and Wales;
seasonally adjusted data
Socio-economic baseline – Old Oak and Park Royal
By Adam van Lohuizen,
Economist
The Old Oak and Park Royal Development Corporation
(OPDC) was created on 1 April 2015. The OPDC will
redevelop the Old Oak and Park Royal area west London,
the location where rail infrastructure projects HS2 and
Crossrail will meet. The development is expected to
deliver 25,500 new homes and create 65,000 new jobs
over the next 30 years.
9
GLA Economics has recently1 analysed a variety of socio-economic and
demographic indicators to create a baseline against which the impacts of the
Old Oak and Park Royal regeneration project can be measured over time. This
baseline will be used as a reference point in future years to measure changes in
these indicators to assess the impact that the regeneration project is having on
the Old Oak and Park Royal area.
Old Oak and Park Royal is an area of concentrated commercial activity. The
development zone itself, currently has a low number of residents and largely
represents business activity and infrastructure. For those that do live in the area,
generally the socio-economic measures show that when compared to Greater
London, the area is disadvantaged across a number of different indicators.
Some of this performance can be attributed, at least in part, to the population
of the area being younger than the overall London population, with residents
up to the age of 30 accounting for 5.3 per cent more of the population when
compared to London as a whole. Since 2007, population growth in the area has
generally been stronger than overall London population growth (Figure A1). The
population density of the area is quite low, which can be attributed to the small
amount of residential land and the prominence of commercial land in the area.
Source: GLA Datasore from the
ONS
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
2003
2004
2005
2006
2007
OPDC Area
2008
2009
OPDC Region
2010
2011
2012
2013
2014
Greater London
1 Van Lohuizen, A., March 2016, ‘Working Paper 74: Socio-economic baseline – Old Oak and
Park Royal’, GLA Economics.
London’s Economy Today | Issue 164
Figure A1: Population
growth, 2003 – 2014
Compared to Greater London, the community within the area has a larger
share of Black / African / Caribbean / Black British ethnic groups and a lower
proportion of white residents. Owner occupation rates are less common than
across London, with a larger share of households living in social housing relative
to London. This could at least be in part due to the younger age profile of the
area. The average household size is slightly larger than the London average,
with households also more likely to be overcrowded, which can be attributed to
the lower share of households that are owner-occupiers (where overcrowding
is less common), and higher rates of overcrowding in the private rented sector
(Figure A2).
Source: 2011 Census
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Owner-Occupiers
Social Rented
OPDC Area
OPDC Region
Private Rented
London
The housing stock has a greater share of flats and terraced houses than across
London, while median house prices are currently lower than in the surrounding
boroughs. New house building has been taking place within the boundaries of
the Old Oak Park Royal development zone over the past year, with 161 new
homes completed for the year, 85 per cent of which were for social rent or
shared ownership.
Household incomes in the area are lower by around one-quarter when compared
to London-wide incomes despite having experienced similar growth in incomes
since the economic downturn. This is consistent with lower rates of economic
activity and higher rates of unemployment across most different demographic
groups that live in the area. Long-term unemployment is also more common,
resulting in a higher share of the population claiming benefits through Job
Seekers Allowance or Universal Credit.
Levels of education tend to be below London averages in terms of both
results for students still in school, and the level of qualifications that have
been obtained for the working-age population. The health of the community
London’s Economy Today | Issue 164
Figure A2: Share
of households with
insufficient bedrooms,
by tenure, 2011 Census
10
Figure A3: Median
household income
2012/13
Source: 011 Census
11
in the area is also below London average levels, with the rates of disability or
long-term illness, and childhood obesity higher than London averages. Life
expectancy in the area was also lower, while the average rate of deprivation in
the area places it in the most deprived 20 per cent of areas in London.
GLA Economics has estimated that the area generated £2.58 billion worth
of economic activity in 2012, predominantly driven by industries, such as
information and communication, wholesale and retail trade, and manufacturing.
There are over 52,000 people employed in this commercial area with them
being employed by 2,250 different enterprises. Wholesale and retail trade and
manufacturing industries were the largest in the area in terms of the number of
people employed.
If you would like to know more about the socio-economic characteristics of
the Old Oak and Park Royal area, please download Working Paper 74 from our
website.
London’s Economy Today | Issue 164
There is greater access to transport in the area when compared to the average
across London, which is likely due to the number of tube stations in the area,
with journeys into the area on the tube or overground more common than
journeys leaving the area. Usual residents are less likely to have access to a
vehicle, while on a per capita basis road accidents are more common than at the
wider London level, but this is at least in part due to the low population density
and commercial nature of the area. Over a third of land within the Old Oak Park
Royal development zone is designated for manufacturing use alone.
Additional information
Data sources
Tube and bus ridership
Transport for London on 020 7222 5600
or email: [email protected]
GVA growthExperian Economics on 020 7746 8260
Unemployment rates
www.statistics.gov.uk
12
Glossary
Acronyms
BCC
BRES
CAA
CBI
CLG
GDP
GVA
ILO
British Chamber of Commerce
Business Register and Employment Survey
Civil Aviation Authority
Confederation of British Industry
Communities and Local Government
Gross domestic product
Gross value added
International Labour Organisation
IMF International Monetary Fund
LCCI London Chamber of Commerce and Industry
LET London’s Economy Today
MPC Monetary Policy Committee
ONS Office for National Statistics
PMI Purchasing Managers’ Index
PWCPricewaterhouseCoopers
RICS Royal Institution of Chartered Surveyors
London’s Economy Today | Issue 164
Civilian workforce jobs
Measures jobs at the workplace rather than where workers live. This indicator captures total
employment in the London economy, including commuters.
Claimant count unemployment
Unemployment based on the number of people claiming unemployment benefits.
Employee jobs
Civilian jobs, including employees paid by employers running a PAYE scheme. Government
employees and people on training schemes are included if they have a contract of employment.
Armed forces are excluded.
Gross domestic product (GDP)
A measure of the total economic activity in the economy.
Gross value added (GVA)
Used in the estimation of GDP. The link between GVA and GDP is that GVA plus taxes on
products minus subsidies on products is equal to GDP.
Tube ridership
Transport for London’s measure of the number of passengers using London Underground in a
given period. There are 13 periods in a year. In 2015/16 there are eleven 28-day periods, one
26-day period and one 32-day period. Period 1 started on 1 April 2015.
Bus ridership
Transport for London’s measure of the number of passengers using buses in London in a given period. There are 13 periods in a year. In 2015/16 there are eleven 28-day periods, one 26-day period and one 32-day period. Period 1 started on 1 April 2015.
GLA Economics
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April 2016
ISSN 1740-9136 (print)
ISSN 1740-9195 (online)
ISSN 1740-9144 (email)
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