3.1. Introduction

This chapter looks at the statistics on the labour market and economic activity across the West Midlands that are available via Nomis. Nomis is a web-based database of official labour market statistics. The service is run by the University of Durham on behalf of the Office for National Statistics (ONS) via the Web [www.nomisweb.co.uk].

This chapter reports on the percentage of people who are reported as being economically active and/ or employed in the Labour Force Survey. It also reports on the hours they work, the unemployment rate and how long people have been unemployed, the new opportunities for employment and the number of businesses across the West Midlands.

3.2. Labour Force Survey

The Labour Force Survey (LFS) 2001 is a quarterly sample survey carried out by interviewing people about their circumstances and work. It is the largest regular household survey in this country and provides a rich and vital source of information about the labour force using internationally agreed concepts and definitions.

The most economically active population was that of East Staffordshire (86.7%) and the least being Birmingham (71.1%) (Table 3.1) Birmingham also had the lowest level of economically active females: less than 61.5% of women aged 16 to 59 seeking employment compared to over 81.5% in South Staffordshire.

Table 3.1. Percentage of people economically active by Local Authority, age and sex, 2001

The LFS also records those employed (Table 3.2), where once again Birmingham had the lowest levels. It is interesting to note that the four authorities below 70% are quite diverse in character, Oswestry, Sandwell, Wolverhampton and Stoke Upon Trent. The highest levels of employment were in South Staffordshire where 85.7% of people were employed (89.4% of males and 81.5% of females).

Table 3.2. Percentage of people employed broken down by Local Authority, age and sex, 2001

Census and the LFS

The 2001 Census questions were developed to approximate those used in the LFS. However, there are differences between the two. For example in the Census results full-time students are not shown in the figures for employment or unemployment; they are separately identified (as economically active students), whereas in LFS estimates they are included in the unemployed figures. The Census covers the 16-74 age group, whereas LFS headline estimates of the numbers employed and unemployed are typically presented for all those of working age (16-64 for men and 16-59 for women). The Census includes people living in institutions, such as soldiers' barracks, old people’s homes and halls of residence, which the LFS does not, at present, cover fully. Also the ways in which Census and LFS data are collected lead to differences in the estimates. Census forms are self-completed whereas the LFS data is collected by face-to-face interviews. ONS's expectation is that estimates of employment from the Census will be lower (and unemployment higher) than those from the LFS. Readers should bear this in mind when considering which of these measures best describes their population given the differences in data collection.

3.4. Claimant rates and duration

An alternative way of looking at unemployment rather than using surveys is to consider those claiming benefits. Nomis provides a monthly count of those claiming Job Seekers Allowance (JSA). Job Seekers Allowance replaced Unemployment Benefit and Income Support in 1996 and is payable to those capable of, available for and actively seeking work.

The numbers claiming JSA declined slowly between January 2002 and December 2003 and demonstrate no seasonal variation (figure 3.1).

Figure 3.1. Temporal trend in the percentage of working age population claiming Job Seekers Allowance, Jan 2002 to Dec 2002, West Midlands

Given the employment levels described in the LFS it is not surprising to see that Birmingham has the highest percentage of the population claiming benefit (5.2%) (Table 3.3). However the claimant levels in Oswestry are not as high as expected (1.9%) given their low surveyed employment levels in Table 3.2 (69.2%). This may be due to the sample size in the LFS or because they are claiming other benefits such as for disability.

Table 3.3. The percentage of working age population claiming job seekers allowance, Jan 2002 to Dec 2002 by Local Authority

The duration individuals have been claiming JSA is also recorded. More than one in four (25.3%) claimants in Birmingham had been claiming for over 12 months compared to only 7.3% in Malvern Hills (Table 3.4).

Table 3.4. Percentage of claimants who have been claiming Job Seekers Allowance for over 12 months by Local Authority, Jan 02 to Dec 02

3.5. Vacancies

In addition to information on unemployment across the region, there are also data available on the number of vacancies notified to employment service job centres. These data show that there is a temporal trend in vacancy notifications, with most notifications occurring in the autumn months and in March (Figure 3.2).

Figure 3.2. Temporal trend in vacancy notifications, West Midlands June 2002 to May 2003

The vacancy data are provided grouped into Standard Occupational Classification (SOC90) unit and geographical district (Table 3.5).

Table 3.5. Vacancies by Standard Occupational Classification group, by Job Centre service Areas, June 2002 to May 2003

3.6. Hours worked

The New Earnings Survey (NES) 2002, reports on earnings and working hours. However analysis of the statistics is difficult at sub regional level due to the sample size. The most robust statistic across the region is for total hours worked. This is defined as the normal basic hours of an employee whose pay for the pay-period was not affected by absence and the overtime hours for which the employee received overtime pay, in the pay-period. The survey found that people in Birmingham and Solihull worked on average significantly less hours than the regional average, whereas those in Sandwell, Herefordshire, East Staffordshire and Walsall worked significantly more hours than the regional average (Figure 3.3). This could be reflective of the type of employment available especially the ratio of part-time to full-time jobs.

Figure 3.3. Total hours worked by full time workers by Local Authority in 2002, with 95% confidence intervals

3.7. VAT registrations

Data on the number of Value Added Tax (VAT) registered companies are also provided via Nomis. To be registered for VAT the value of a company’s taxable supplies in the past 12 months or less has to exceed the current VAT registration threshold of £56,000, or the value of their taxable supplies in the next 30 days is expected to exceed this threshold. If a company does not meet these thresholds it can choose to voluntarily register. A company can cancel a registration (deregister) if they stop making/receiving taxable supplies, transfer the business as a going concern or change the legal status of the business. This data set is produced by the Department of Trade and Industry based on VAT information received from HM Customs and Excise. By the end of 2002 there were 0.3% more companies registered for VAT compared to the year before. Oswestry saw the largest growth of registrations, up 2.7% and Wolverhampton saw the greatest decrease, down 5.1% (Table 3.6).

Table 3.6. VAT registered companies in 2002, change in registrations (2001 to 2002) by Local Authority

3.8. Workforce Composition

The VAT data alone provides little information on the industries in which people work. The 2001 Census recorded this information by industrial sector for those aged 16 to 74 and in employment the week before the Census. The largest employment sector is manufacturing (21.3%), followed by Education and Health (19.4%) and the Wholesale and Retail sector (18.1%) (Figure 3.4). These data are limited in their usefulness as they say very little about company turnover or the number of employees per company.

Figure 3.4. Composition of the West Midlands workforce, by industrial sector, 2001

By combining the Census and VAT registrations it is possible to calculate the average size of businesses in each of the sectors across the West Midlands (Table 3.7). These results are estimates rather than true figures, as some workers will commute into and out of the West Midlands to work and it excludes companies not registered for VAT. The two largest employers are the Mining and Utilities and Education and Health sectors. Both of these sectors are dominated by a number of very large employers such as electricity and water companies and NHS Trusts. In contrast to this most agriculture concerns are family run and therefore may be small in size.

Table 3.7. Estimated average size of companies working in each sector

References

ONS Census 2001 - Work of England and Wales. http://www.statistics.gov.uk/census2001/profiles/commentaries/work.asp. 2003

Department of Work and Pensions. Jobseeker's Allowance http://www.jobcentreplus.gov.uk/cms.asp?Page=/Home/Customers/WorkingAgeBenefits/497#howmuch. 2003 IntroductLife expectancy by local authority

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