Foreword
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A rapid improvement in qualifications in the working-age population, with a rising proportion with advanced qualifications and a declining proportion with no qualifications, suggests a strong improvement in the region’s skill profile.
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In the Black Country a significant share of the population who have worked in manufacturing and skilled trades have skills which are not formally recognised as qualifications. This leads to an overestimate of the extent of the qualifications gap, which is nonetheless significant.
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The steep rise in claimant count through the pandemic has, as a proportion, been greatest in more rural areas, and in the Coventry and Warwickshire LEP in general. This means more claimants in areas not normally accustomed to providing for large numbers of claimants. On the other hand, the largest absolute increase in claimant numbers has been in the urban core.
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While the region as a whole is more resilient than the UK average to an ageing population, the projected population changes are very uneven across the region in terms of both young and retirement-age people.
Employment by sector
Relative to the British average, the West Midlands has a larger employment in manufacturing and in the public health and education, but a significantly smaller IT sector. Although the need to replace retiring workers will continue to drive employment in manufacturing even as total employment declines, the relatively younger population in the West Midlands poses a challenge for future job creation. Expansion in professional services and other regional strengths such as biosciences will be integral to this.
Employment by sector, West Midlands 2020:
Arts, entertainment and other services - 4.1
Health - 14.5
Education - 10.3
Public administration and defence - 4.1
Business administration and support services - 10.4
Professional, scientific and technical - 7.4
Property - 1.8
Finance and insurance - 3.3
Information and communication - 2.6
Accommodation and food services - 5.8
transport and storage - 5.3
Retail - 8.8
Wholesale - 4.5
Motor trades - 2.0
Construction - 4.0
Manufacturing - 9.6
Mining, quarrying and utilities - 1.3
Agriculture, forestry and fishing - 0.0
Employment by sector, Great Britain 2020:
Arts, entertainment and other services - 4.1
Health - 13.5
Education - 8.9
Public administration and defence - 4.5
Business administration and support services - 8.8
Professional, scientific and technical - 8.7
Property - 1.8
Finance and insurance - 3.5
Information and communication - 4.4
Accommodation and food services - 7.2
transport and storage - 5.1
Retail - 9.3
Wholesale - 3.7
Motor trades - 1.8
Construction - 4.8
Manufacturing - 7.8
Mining, quarrying and utilities - 1.3
Agriculture, forestry and fishing - 0.8
Figure 1: Employment by sector, West Midlands Region versus Great Britain comparison, by percentage of workforce so employed. Source: Business Register and Employment Survey, 2019 (published 2020), 2020 SAP boundaries
Employment by occupation
The Black Country diverges most from the national average, being over-represented in skilled trades, caring and leisure, and process, plant, and machine operatives, and under- represented in senior officials, managers, and professional occupations. The region’s strength in professional services is more concentrated in the other two LEP areas, whose profiles are much closer to the UK in general.
Consequently, while the forecast change in employment across occupations through 2027 observed later in this report is similar across LEPs in percentage terms, it is a particular challenge in the Black Country in terms of raw numbers, with the projected declines being in occupations which employ fewer people, and the projected growth being in occupations in which the Black Country is under-represented.
Occupational Category |
Black Country |
Coventry and Warwickshire |
Greater Birmingham and Solihull |
UK |
| Manager, directors and senior officials | 8.6 | 10.8 | 10.6 | 10.9 |
| Professional occupations | 17.8 | 27.1 | 21.1 | 23.4 |
| associate professional and technical | 14.0 | 12.9 | 14.7 | 15.6 |
| administrative and secretarial | 9.8 | 9.5 | 11.3 | 10.3 |
| Skilled trades | 10.8 | 7.5 | 8.1 | 9.0 |
| caring, leisure and other service occupations | 11.9 | 7.7 | 9.7 | 9.0 |
| sales and customer services | 5.8 | 7.6 | 7.5 | 7.2 |
| process, plant and machine operatives | 9.1 | 6.2 | 6.7 | 5.6 |
| elementary occupations | 12.1 | 10.7 | 10.3 | 9.1 |
Table 1: Breakdown of occupations by major category, LEP area, and UK comparisons. Source: Annual Population Survey, October 2019 – September 2020, 2020 SAP boundaries
2019 comparison of enterprise size, West Midlands Skills Advisory Panel (WMCA) area vs England:
The West Midlands does not differ greatly from the England average in terms of is distribution of enterprises by size. Business of less than ten employees dominate the records, and as a result comprise a large share of the total number of employees in the region.
Given that the median firm is very small, it is particularly important that the apprenticeship system is well understood by small firms and they are able to participate with a minimum of administrative overhead. The latest Employer Skills Survey suggests that a larger proportion of small firms (2-4 employees) are not aware of how the apprenticeship system functions and what is involved (7%) than do large firms of 250+ employees (only 1%).
It also increases the importance of fine-grained data collection of firms at risk during economic changes, so that tailored business support can be offered and the region’s industrial strategy can be implemented at all levels of the economy
Business birth and death rates
The last few years have seen a steep rise in the business death rate in the West Midlands, which at two points, 2018 and 2020, equalled its birth rate. Meanwhile, the total birth rate of new businesses has stayed essentially constant. This trend would suggests a consolidation of activity into a smaller number of firms, and/or the economic fallout of the coronavirus pandemic causing some firms to go under and reducing the overall diversity of economic activity in the region.
The England average has seen a falling business birth rate and constant death rate. This implies a similar trend of consolidation in both areas, caused in England as a whole by a falling business birth rate but in the West Midlands by a greater winnowing of firms over time. The constant business birth rate in the West Midlands compared to the falling national average is encouraging and implies a continuing dynamism.
Employment rate and level:
The West Midlands has for decades had a lower employment rate than the UK average, partly owing to a broad decline in employment the region’s core strength of manufacturing.
The fall in employment stemming from COVID-19 has not had an even geographical footprint. As discussed in analysis of the claimant count, the employment impact of the pandemic has been proportionally greatest in areas which normally have low unemployment.
Nominal GVA per hour worked
The decisive influence on hourly productivity is the sectoral composition of the economy. The West Midlands’ lower share of IT and professional services, and higher proportion of public services, gives it a lower productivity by this metric than the UK average.
This difference is not evenly distributed through the region, but instead more concentrated in the Black Country. However, Coventry and Warwickshire has actually overtaken the UK average over the last decade, and is now significantly above it.
Median gross weekly wage for full-time workers
The decisive influence on hourly productivity is the sectoral composition of the economy. The West Midlands’ lower share of IT and professional services, and higher proportion of public services, gives it a lower productivity by this metric than the UK average.
This difference is not evenly distributed through the region, but instead more concentrated in the Black Country. However, Coventry and Warwickshire has actually overtaken the UK average over the last decade, and is now significantly above it.
Claimant Count and Alternative Claimant Count
The rise in the claimant count has, proportionally, been smaller in the West Midlands than in the UK as a whole. However, this is against the backdrop of a higher claimant count to begin with.
The increase has proportionally been greater in areas which normally have lower unemployment, such as Coventry and Warwickshire and more rural parts of the region in general, while the largest absolute increase has been in the urban core.
Population by age group
The West Midlands is younger than the UK mean, an advantage in weathering the future economic burden of a falling birth rate. However, given that a large proportion of public services are funded out of national taxation, this does suggest that the region may in future make a larger contribution in tax revenue relative to services it receives.
The occupational and sector employment profiles already discussed imply a challenge in creating enough jobs in the knowledge economy to employ young people who might in previous decades have gone into manufacturing and manual trades.
Income, Employment and Education deprivation
• By overlaying the share of residents with no qualifications over a map of deprivation in the region, the strong correlation between the two is made apparent.
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How far the West Midlands is more deprived than the UK average depends on the geography. The urban core comprising the West Midlands Combined Authority constituent local authorities is more urban, and hence more deprived. Including the three LEP areas, or the broader region, dilutes this difference.