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The Leeds Economy

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					The Leeds Economy
  CONTENTS
  Gross Value Added and productivity
  Business stock and level of entrepreneurship
  Major organisations
  Historical economic development




Gross Value Added and productivity
Sources of data
ONS produces annual estimates of Gross Value Added (GVA) for different parts of the UK. There is a
two year time lag: the latest data are for 2005. The data for 2006 will be published in December 2008.
The lowest spatial level for which they are made is NUTS 3. There are 128 NUTS 3 areas in Great
Britain. Leeds MD is a NUTS 3 area in its own right, but some other NUTS 3 areas are groups of local
authorities. For example, Calderdale, Kirklees and Wakefield together comprise a NUTS 3 area.

ABI data on the number of employees are available on a local authority basis and so can be used
with the GVA data to provide rough productivity estimates (GVA per employee) for NUTS 3 areas.

GVA
    •   Leeds MD’s GVA was £15.27bn in 2005
    •   It is around 43% of West Yorkshire’s, 19% of Yorkshire and the Humber’s, and 1.4% of UK’s
    •   Leeds is by far the largest centre of economic activity in the Yorkshire and Humber region: it
        is 85% higher than Sheffield’s and 130% higher than Bradford’s, for example
    •   Leeds’ GVA is the 3rd largest of the 30 NUTS 3 areas in the north of England, exceeded only
        by Greater Manchester South (£27.92bn) and Birmingham (£18.04bn)
    •   Compared with other major GB cities and conurbations, its GVA is exceeded only by London
        (£206.32bn and comprising 5 NUTS 3 areas), Greater Manchester South (£27.92bn) and
        Birmingham (£18.04bn). Greater Manchester North’s is £14.16bn, Glasgow’s £14.11bn,
        Tyneside’s £13.60bn and Edinburgh £13.02bn.
    •   Growth between 2000 and 2005 was 30% in current prices, a faster rate than in West
        Yorkshire and Yorkshire and the Humber, but equal to GB. Similar to growth in Greater
        Manchester South, it was faster than in other major English cities and conurbations, though
        not reaching the levels of Cardiff, Edinburgh, Glasgow or Tyneside.

Productivity and sectors
    •   GVA per employee was £37,050 in 2005
    •   It is higher than West Yorkshire and Yorkshire and the Humber’s, but is 37% lower than
        London
    •   It is lower than Greater Manchester South, Nottingham, Bristol, Cardiff and Edinburgh
    •   Growth between 2000 and 2005 was 22% in current prices. This was slightly higher than
        West Yorkshire and Yorkshire and the Humber, but lower than GB.
                             Table 4.1 GVA and GVA per employee

    Selected Spatial Areas            GVA, £m, Current Prices            GVA/Employee, £,
                                                                           Current Prices
                                    2000        2005          %       2000     2005       %
                                                            change                     change
GB                                  805,565 1,048,874         30     31,948 39,585        24
NUTS 1
London                              134,720 206,324       53       33,177 50,811     53
Yorkshire and the Humber             61,034     78,513    29       29,371 35,178     20
NUTS 2
West Yorks                           27,875     35,219    26       29,725 35,976     21
South Yorks                          13,359     17,660    32       27,570 32,544     18
North Yorks                           9,551     12,478    31       29,864 36,411     22
E Riding & N Lincs                   10,249     13,155    30       30,510 35,786     17
NUTS 3
Leeds                                11,753     15,268    30       30,310 37,050     22
Bradford                              5,643      6,623    17       28,783 34,437     20
Calderdale, Kirklees &               10,479     13,328    27       29,735 35,585     20
Wakefield
York                                  2,932      3,692    26       31,360 36,947     18
Sheffield                             6,354      8,265    30       28,299 32,801     16
Tyneside                             10,124     13,603    34       28,903 34,199     18
Greater Manchester North             11,556     14,157    22       27,599 33,046     20
Greater Manchester South             21,551     27,925    30       30,648 38,008     24
Liverpool                             5,585      7,133    28       28,360 31,568     11
Nottingham                            5,019      6,957    39       28,459 37,627     32
Birmingham                           14,745     18,038    22       30,926 36,356     18
Bristol                               7,603      9,506    25       31,957 41,384     29
Cardiff & Vale of Glamorgan           6,599      8,978    36       31,304 38,630     23
Edinburgh                             9,445     13,017    38       32,363 41,106     27
Glasgow                              10,516     14,108    38       28,897 34,263     19
Source: Local Gross Value Added (ONS, December 2007) and Annual Business Inquiries 2000
and 2005 (NOMIS)
London: 32 Boroughs and City of London
North Yorks: North Yorks County plus York
E Riding & N Lincs: Hull, E Riding, NE Lincs, N Lincs
Tyneside: Newcastle, Gateshead, N & S Tyneside
Gtr Manchester North: Bolton, Bury, Oldham, Rochdale, Wigan
Gtr Manchester South: Manchester, Salford, Stockport, Tameside, Trafford


Table 4.2 shows the contribution of each sector to output
                              Table 4.2 Output by sector, Leeds MD
              Sector                    2008, £m    % of whole    Sector’s % of      % change in
                                                     economy         whole           output 1998-
                                                     output in      economy             2008
                                                       2008         output in
                                                                      1998
Agriculture, forestry, fishing,         40              1            4                    -67
mining, energy, and water
Manufacturing                        1,754            11            16                    -2
Construction                         1,046              7            6                    50
Wholesale and retail                 1,851            12            13                    27
Hotels and restaurants                 375              2            3                    32
Transport and communications         1,103              7            7                    40
Finance and business services        5,569            36            25                    96
Public administration; community,    3,625            23            26                    23
social & personal services;
education and health
Whole economy                       15,464           100           100                    38
Source: Yorkshire Futures/Experian Business Strategies (Spring 2008)



Business stock and the level of
entrepreneurship
The number of businesses registering and de-registering for VAT are useful indicators of the scale of
business start-ups and closures and so the level of entrepreneurship in a particular area.

Notes on the data
The figures do not give a complete picture of business start-ups and closures: approximately 42% of
UK enterprises at the beginning of 2006 were VAT-registered. Part of the explanation is that there are
a few VAT exempt sectors and also some firms’ annual turnover is below the threshold for VAT
registration which was £64,000 from April 2007. Some businesses below the threshold do register,
however. About a quarter of all registrations have a turnover below the threshold.

For detailed statistical reasons, totals for the same year in different tables do not always exactly
correspond, and the stock at the beginning of one year plus the sum of registrations and de-
registrations in that year might not exactly correspond with the stock at the end of the year.

Data are not available at the ward level.

Business survival rates (the proportion of businesses surviving say 3 years after registration), are not
published for Leeds. They are available at the West Yorkshire level.
VAT data: Stock, registrations and de-registrations
Table 4.3 shows changes in the stock, registrations and de-registrations for Leeds MD between the
beginning of 1996 and the end of 2006. The stock of VAT-registered companies increased by 2,205 or
13% over the period.

The total number of enterprises in Leeds is unknown but if the UK ratio holds (where 42% of all
enterprises are VAT-registered) then there could be over 46,000, an increase of approximately 8% since
2001
                 Table 4.3 VAT registrations and de-registrations 1996-2006, Leeds MD
          Year         Stock at      Registrations    De-registrations     Net     Stock at end
                     start of year                                       Change       of year
          1996         17,255            1,820            1,715           105        17,360
          1997         17,360            1,955            1,725           230        17,590
          1998         17,595            1,920            1,740           180        17,775
          1999         17,775            1,880            1,775           105        17,880
          2000         17,880            1,945            1,800           145        18,025
          2001         18,025            1,835            1,795            40        18,065
          2002         18,065            1,955            1,875            80        18,145
          2003         18,150            2,095            1,735           360        18,510
          2004         18,510            2,040            1,770           270        18,780
          2005         18,775            1,965            1,560           405        19,180
          2006         19,180            2,030            1,645           385        19,565
       Source: Small Business Service, BERR


Comparative change in stock
Table 4.4 shows, for Britain’s urban areas (counties have been excluded), where the largest stocks are
and the rate of growth. Leeds, with a stock of over 19,565 companies, has the third largest stock in
Britain. London’s stock is over 309,000, followed by Birmingham with over 23,500. However, the growth
in Leeds’ stock has been moderate.

                   Table 4.4 Key urban areas: stock and changes in stock
                                    Stock at end 2006       % change in stock beginning
                                                            1996 to end 2006
 London                                   309,225                      28.3
 Edinburgh                                  13,855                     26.1
 Bristol                                    12,385                     20.6
 Cardiff                                     8,035                     17.7
 Kirklees                                   11,190                     17.6
 Liverpool                                   8,665                     17.3
 Leicester                                   8,085                     16.3
 Leeds                                      19,565                     12.7
 Bradford                                   11,555                     12.7
 Sheffield                                  12,015                     12.4
 Nottingham                                  6,420                     11.4
 Glasgow                                    13,735                     10.9
 Birmingham                                 23,490                     10.6
 Newcastle                                   5,650                     10.4
 Aberdeen                                    6,660                       8.9
 Manchester                                 11,865                       3.1
 West Yorkshire                             56,035                     15.6
 Leeds City Region                          79,200                     17.1
 Yorkshire & Humber                       139,970                      15.8
 Great Britain                          1,892,385                      19.9
 Source: Small Business Service, BERR
Registration rates
Table 4.5 shows that Leeds had a registration rate in 2006 only slightly lower than the national rate.
Areas with high registration rates tend to have high de-registration rates, reflecting the short lifespan
of many new businesses.

                                Table 4.5 Business registration rates

                  Area                                Registration rate per
                                                     10,000 resident adults,
                                                              2006
                  London                                       57
                  Bristol                                      39
                  Manchester                                   37
                  Edinburgh                                    37
                  Kirklees                                     34
                  Leeds                                        33
                  Bradford                                     31
                  Birmingham                                   30
                  Cardiff                                      30
                  Sheffield                                    25
                  Liverpool                                    25
                  Nottingham                                   26
                  Newcastle                                    25
                  West Yorkshire                               33
                  Leeds City Region                            33
                  Yorkshire and Humb                           31
                  GB                                           37
                  Source: Small Business Service, BERR




Sectors
Table 4.6 shows the exceptional growth in recent years of the number of enterprises in the finance and
business services sector. This was at similar rates locally, regionally and nationally. By contrast, the
numbers of enterprises in the manufacturing and wholesale and retail sectors have fallen more rapidly in
Leeds than in the region or nationally.
              Table 4.6 Changes in business stock by sector, start 2001 to end 2006
                                        LEEDS MD                      Yorks and      Great
                                                                       Humber        Britain
                          Stock, end    Stock end     % change        % change      % change
                             2001          2006
Agriculture, forestry &       370           355           -4               -3          -3
fishing, mining, energy,
water
Manufacturing                2,125         1,770         -17               -4          -6
Construction                1,915         2,290          20               21           18
Wholesale and retail        4,540         4,520            -                5           4
Hotels and restaurants      1,190         1,355          14               16           18
Transport and                 825           935          13               11           10
communications
Financial                   5,455         6,730          23               22           18
intermediation, real
estate, renting &
business activities
Public administration;      1,640         1,610           -2                3          60
community, social &
personal services;
education and health
         TOTAL              18,060        19,565           8              10            9
Source: Small Business Service, BERR



Size of workplaces

Note on the data
The Annual Business Inquiry (ABI) estimates the number of “data units”, which are roughly equivalent
to workplaces, and the number of employees working at them. Data units are not equivalent to
businesses: one business could have several workplaces in Leeds.

Table 4.7 shows that most workplaces are medium or small scale. In 2006, around 80% of all
workplaces each employed fewer than ten people. These accounted for 15% of all employees in
Leeds. 1% of workplaces each employed more than 200 people, but they account for 39% of total
employees.

The table also shows that the 14% growth in employment from 1998-2006 was accompanied by only
a 8% increase in the number of workplaces. The growth in both employment and workplaces over the
period is particularly apparent in the workplaces employing over 50.

                            Table 4.7 Size of workplaces, Leeds MD
         Unit (workplace)         1-10       11-49     50-199     200+            All
         size
         1998
         Units (workplaces)     20,000       3,800       900       300         24,900
         Employees               62,900     84,500     81,000    136,900       365,200
         2006
         Units (workplaces)     21,700       3,900      1,100      300         27,000
         Employees               64,000     87,000    102,000    163,700       416,800
         Source: Annual Business Inquiry, NOMIS
Major organisations
Largest Employers in Leeds
53 companies and public sector organisations each employ more than 500 people in Leeds.

Employ         Organisation                         Activity

 Over 10,000   Leeds City Council                   Local government
               Leeds Teaching Hospitals NHS Trust   Healthcare services in Leeds

 Over 2,000    British Telecommunications           Telecommunications
               BUPA                                 Medical services
               Direct Line Group                    Insurance and motoring assistance
               First Direct                         Telephone banking
               Halifax                              Bank
               Leeds Metropolitan University        Higher education
               Royal Mail                           Postal services
               University of Leeds                  Higher education
               Ventura                              Customer Management services

Over 1,000     ASDA Group                           Retail
               British Library                      Library; document supply centre
               Centrica                             Gas distributor
               Department of Health                 Government services
               Department for Work and Pensions     Government services
               G E Money                            In store credit card services
               Halifax Direct                       Direct Banking
               Leeds City Link                      Bus and coach operators
               Moores Furniture Group               Kitchen & bedroom furniture
               PricewaterhouseCoopers               Chartered accountants
               Yorkshire Bank                       Banking and financial services
               Yorkshire Power                      Electricity supply

Over 500       Barclays Bank                        Bankers
               BT Mobile                            Telecommunications
               Carlsberg                            Brewers
               Commusischorleys                     Direct mail and communications
               Dependable Services                  Hygiene rental Services
               Depuy International                  Medical equipment
               Elite Group                          Freight forwarders
               Eversheds                            Legal services
               HSBC                                 Banking
               HSBC Customer Service Centre         Telephone support
               IBM UK                               Computer systems
               KPMG                                 Management consultancy
               Leeds Building Society               Building society
               Leeds Industrial Co-op Soc           Retail
               Lever Faberge                        Toilet preparations manufacturer
               Lloyds TSB                           Banking and allied financial services
               Loop Customer Management             Customer liaison, billing
               Marks & Spencer                      Retail
               Nampak Cartons                       Cartons for food sector
               National Westminster Bank            Bankers
               O2                                   Cellular phone operation
               Office Cleaning Services             Contract office and window cleaning
               Park Lane College                    Further education
               Premier Farnell                      Distribute electronic, electric products
               Schneider Electric                   High voltage switchgear
               Scientific Games                     Lottery and games tickets
               Symphony Group                       Kitchen furniture
               Walker Morris                        Commercial law firm
                 Yorkshire Post Newspapers            Newspapers and publications
                 Yorkshire Television                 TV programme company
                 Yorkshire Water Services             Water and sewerage services

Source: Economic Policy, Leeds City Council



Historical Economic Development
1322    A fulling mill is erected on the east side of Leeds Bridge, encouraging the growth of cloth
        production in the district. Specialist workers, such as dyers gained Leeds a reputation as a
        finishing centre for the woollen industry in the surrounding area.
1626    Charter of Incorporation awarded by Charles I in recognition of Leeds’ prosperity and fame in
        the making, selling and exporting of woollen cloth. Leeds adopts the Golden Fleece as its
        coat of arms.
1661    Cloth workers guild set up by the Corporation. Though cloth dominates the economic life of
        Leeds, the town is also important for other trades and professions. Five other guilds are
        formed. The first largely consists of building workers; the second shopkeepers. The three
        others consist of cordwainers (shoemakers); tailors and workers in hardware. Coal mining
        and quarrying continue to be highly important industries in the borough.
1698    Traveller Celia Fiennes wrote, “Leeds is a large town…esteemed the wealthyest town of its
        bigness in the County”.
1699    Termination of the Aire and Calder Navigation gives Leeds a vital link eastwards to Hull and
        the North Sea.
1700    Termination of the Leeds and Liverpool Canal links Leeds to Liverpool and enables raw
        materials to be brought cheaply in bulk to the town.
1755    Act of Parliament aimed at improving street lighting described “The Town…is a place of great
        Trade and large extent, consisting of many streets, narrow lanes and alleys, inhabited by
        great numbers of Tradesmen, Manufacturers, Artificers..”.
1758    Opening of Middleton Colliery Railway, the world’s first commercial railway.
1792    Building begins on the world’s first woollen factory at Bean Ings, Wellington Street by
        Benjamin Gott - one of the most significant and innovative figures in the history of the woollen
        industry.
1812    Matthew Murray builds the first successful steam engine at his Hunslet works in south Leeds.
1893    Yorkshire Factory Times writes “Leeds is at last a city" through incorporation by royal charter.
        In the same year, the Chamber of Commerce recognises that the “good fortune” of Leeds is
        based on a diversity of manufacturing and commercial activity.
1902    It was said that “the [Leeds] district is favoured by reason of the variety of its industries and
        the effects of bad trade are never felt to the same extent as in districts which are dependent
        on one or two industries merely.”
1911    Tailoring, engineering and textiles are the three largest industries accounting for 45% of the
        workforce. 30,000 are employed in the ready-to-wear clothing industry alone, which grew
        further under the influence of Montague Burton (1885-1952).
1938    The Leeds Publicity and Development Department could state that the City is not only a
        centre for clothing, printing and engineering, but that “increasing interest is being given to
        furniture making, chemicals and soap manufacture, coach building, watches and clocks, fish
        canning, button making, electrical appliances and accessories.”
1951    Only half of the workforce remains in manufacturing while over two fifths work in services.
        Between 1951and 1973, 37,000 jobs were lost in manufacturing whilst 32,000 were gained in
        the business and service sectors.
1974    Local government reorganisation increases the City’s population by 50% to 750,000 and its
        area to 211 square miles. The creation of Leeds Metropolitan District is largely due to the
        recognition that the City had attained definite regional pre-eminence because of its long
        tradition of commercial activity.
1981    Manufacturing jobs decline to 80,000 jobs, but the strength of the service industries,
        employing almost 190,000, keep employment high by national standards.
1991    Employment in the financial sector grew by over two-thirds during the 1980s to 45,400.
        Manufacturing employs 64,000 across Leeds.
1992    First Direct, providing telephone banking services around the clock is the fastest growing
        employer in Leeds. It is significant to the economic changes in Leeds that their new premises
       were built on a site previously occupied by the manufacturer Waddingtons – its games
       division containing such global brands as Monopoly, Cluedo, and Subbuteo.
2005   Leeds becomes the second largest employer in the financial and business services sector
       outside London, with over 109,000 employees.
2006   Gordon Brown says that the financial and legal strength of centres like Leeds helps to
       underpin the UK’s world class position in financial services.

				
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