Connectivity and Labour Markets in the Northern Powerhouse

What does the future labour market of the North of England look like? What jobs will people have? Where will they live, where will they work and how will they travel between the two (if at all)?

A major project undertaken by Cambridge Econometrics attempted to answer these questions for Transport for the North, to inform their future transport strategy.

The principal findings of the study were:

  • Trends in job polarisation look set to continue, with demand for high-skilled and non-routine medium skilled workers continuing to increase, whilst demand for routine low- and medium-skilled work falls away. The emergence of a “4th industrial revolution” will exacerbate this trend, albeit with the welcome upside of significantly enhanced productivity.
  • However, the ambitious population and employment growth targets outlined in the Northern Powerhouse Independent Economic Review are likely to be constrained by reduced levels of inward migration post-Brexit. This could have significant impacts on skilled labour supply in the North of England.
  • As a result, without significant changes to education and skills policies, the North, in common with the rest of the UK, is likely to experience growing skills mismatches, with low- and medium- skilled workers finding increasing difficulty finding employment, whilst key vacancies persist in high-skilled employment.

Changes to the evolution of the spatial distribution of employment and subsequent commuting patterns across the North were also explored. Findings here included:

  • The trend towards the urbanisation of both employment and population will likely continue. Growing sectors will continue to benefit from close spatial proximity (clustering), and urban areas will continue to densify as a result.
  • A relative increase in the proportion of high-skilled worker, who currently exhibit a greater tendency to commute long-distances, will likely lead to an increase in demand for rail and other medium-distance transport links.
  • This will increase pressure on existing transport networks, as more people commute into urban centres, and increase the attractiveness of city centre residential properties.

However, there is significant nuance and uncertainty behind these trends. Working patterns are changing, and a significant growth in technology-enabled remote working remains a possibility.

Adam Brown Project Manager alb@camecon.com