Employment in London financial district boomed
Britain is experiencing an exceptional period of employment with the rate at its highest since comparable records began in 1971. The unemployment rate is at its joint lowest since 1975. Official annual jobs data released recently showed some positive news for the financial district in particular. From 2015 to 2016, the number of financial district workers rose from 455,000 to 483,000 — an increase of 28,000 jobs, equating to six per cent.
Financial services were the major driver behind this increase and, together with insurance, accounted for 18,000 of these jobs.
When breaking down this data even further, banking (2,500), nonlife insurance (3,000), and insurance brokers (2,500) were the largest growth components.
Business administration, including employment agencies, leasing office equipment, and building services also boomed last year, with an additional 5,500 jobs created, increasing this sector by 10 per cent to nearly 63,000.
The technology sector — specifically the information and communication sector, which has shown strong growth in the financial district (known as the ‘City’) in recent years — has slowed this time, rising from 37,000 to 38,000 jobs (just 2.7 per cent growth). It does, however, still account for 7.8 per cent of City employment.
As the Tech Nation report from this year showed, London hosted 22,000 ‘meetups’ in 2016 — three times as many as in some of the major cities of Europe, for instance, Berlin, Paris and Amsterdam.
The City is clearly growing, and, as economics 101 will show, supply needs to keep up with demand.
That is why there is currently 93 metre square feet of office space in the City, with a further 13.5 metre square feet under construction, to help keep pace with job creation.
This has obviously supported the construction ecosystem here, with an additional 1,500 jobs in the sector.
The common (although maybe not an extremely useful) economic indicator that cranes in a city demonstrate a healthy economy is certainly visible in the heart of London over the past few years.
It remains to be seen what this growth in numbers actually mean for the financial district, and how is it squared with warnings from many that jobs are currently at risk? The point is that much of this growth depends on the opportunities offered by access to global markets.
If Brexit undermines that, and if it causes fragmentation and disruption, we may see the trend going in reverse.
This was a point that the City of London Corporation’s policy chairman, Catherine McGuinness says was consistently made in meetings with politicians and business representatives during three weeks at the conferences for the Liberal Democrat, Labour and Conservative parties.
She reminded all the politicians whom she spoke to that the City, while an economic powerhouse, a major creator, and huge contributor to tax revenues, cannot and must not be taken for granted.
Businesses need clarity and progress on UK’s future relationship with the EU.
This is why the City has been crystal clear in calling for a financial services position paper from the government.
The season of party conferences is over and it is time for the politicians to get on with the serious task in hand.
Businesses, in particular, really need to see some serious advances in negotiations with the EU leading up to the summit meeting to come in December.
UK’s jobs boom will keep on growing as employers say they plan to continue hiring, regardless of indications the economy is slowing down. Economists had feared Britain’s remarkable surge in employment would stutter in the face of weaker GDP growth, but so far companies have defied those worries.
The proportion of firms more confident in their hiring and investment decisions outweighed those becoming more gloomy by a margin of 10 per cent in this month’s survey from the Recruitment and Employment Confederation (REC). It is the third consecutive reading of 10 per cent, indicating sustained resilience in recruitment, though this is down from 20 per cent in February and from 32 per cent in July 2016.
By contrast, a net balance of 9 per cent see the economy overall worsening, though this has not put them off hiring.
Unemployment is already at a 42year low and looks set to keep falling if employers live up to these recruitment plans. “Although the demand for temporary agency workers is declining, the demand for permanent staff remains strong — which is a positive sign,” said Kevin Green, the REC’s chief executive.