Richard Woolhouse, Senior Economist at Centre for Cities, delivered this presentation at the West Midlands Regional Observatory's Annual Conference, 20th October 2009 in Sutton Coldfield, UK. Richard looks at the global recession, government debt, how the recession has impacted different cities and areas of the UK differently, and regional unemployment rates in the UK.
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1. Banking crisis, global recession and recovery
2. Total debt in the US and UK
3. Lest we forget.
In 1989 private debt to GDP in Japan was 212%
Now it is 110%
Government debt to GDP rose over the same time from 51% to
178%
Total debt is broadly unchanged and real GDP has been
essentially flat
4. How have things played out so far?
Collapse in manufacturing and trade
De-leveraging in private sector has begun
IMF talk about
Balance sheet recession
Globally synchronised downturn
Policy measures halted the collapse
5. A recession of the North, Midlands and Wales
6. Regional Unemployment Rates
7. Low skilled cities hit harder
8. The fiscal hole
9. Government finances hit hard
10. Debt is expected to double
11. Debt to remain high for a generation (official
version)
12. But low in a broad historical context!
13. Public spending * IFS & own calculations Thatcher Major
Blair/Brown ?
14. Capital spend cut dramatically. Housing, transport and
regen hit hard. Chart 9: possible departmental spending allocations
(2011/12 2013/14) Source: IFS
15. Public sector vulnerability 2
16. Public sector growth 1998-2008
17. Knowledge Industries in Birmingham
18. Knowledge-Industries in Birmingham UK=1
19. Employment projections (Oxford Economics)
20. Birmingham well placed to benefit in certain sectors
Financial, business and professional services gain big benefits
from locating in large cities Agglomeration economies by sector
High end BPS is unlikely to locate out of London, but the city will
be attractive to - Relocation of back office, shared services and
public sector