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Economy / Jobs

Oh, so that’s why Sheffield is falling behind

The latest instalment of our weekly series, in which we use the Centre for Cities’ data tools to crunch some of the numbers on Britain’s cities. 

Last time, on CityMetric:

 

“My god! What could possibly be going on in Sheffield?”

Egad!

What we neglected to tell you last week – embarrassingly; shamefully – is that there’s probably a relatively simple explanation for all this. Two charts are enough to tell the story.

This one shows the percentage of jobs in each of the five big northern cities that are in the manufacturing sector. As ever, we’re getting our data from the Centre for Cities excellent data tool:

 

Two things are worth noting here. One is that Sheffield has significantly more jobs in making stuff than any of the other four. The other is that there’s no sign of that changing. (It’s tempting to say that the opposite is happening – the numbers went up in four years out of five – but the differences aren’t huge, so that may be over-stating things.)

Here’s the second chart. This time it’s the percentage of jobs in the “Private Knowledge Intensive Business Services”, which is a fancy way of saying “well-paid stuff”.

You can probably guess where this is going.

Yep: Sheffield is doing a lot less well on this one.


So, how does this explain Sheffield being left behind? Well, a big manufacturing sector is not a great thing for the economy of a developed world city. Technology means that factories don’t generate the jobs they once did; competitive pressure from factories all over the world mean that many of the jobs which do exist are unlikely to be particularly well-paid.

Oh, and the UK’s manufacturing sector has been in recession three times in the last eight years.

The most economically successful cities tend to have smaller manufacturing bases, but much larger knowledge-based service industries. On that measure, Manchester and Leeds are clearly way out ahead.

So, yes: if moving from a low-paid manufacturing economy to a high-paid service one is your definition of economic success – which, mathematically, it should be – then Sheffield is quite clearly being left behind its two closest rivals.

To hammer the point home, here’s one more graph. (I know I said there’d only be two graphs in here, but this one’s a good one.) It’s the correlation between weekly wages and manufacturing base in 2014.

Rich cities don’t rely on manufacturing. Just say no, kids.

Jonn Elledge is the editor of CityMetric. He is on Twitter, far too much, as @jonnelledge.

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