Venturefest Bristol 2011 Professor Nigel jump, University of Bath

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Venturefest Bristol 2011 Professor Nigel jump, University of Bath

  1. 1. Economic Prospects 2012 Onwards VENTUREFEST Bristol & Bath Science Park, 3rd November 2011 Nigel F JumpVisiting Professor in Economics, University of Bath Nigel Jump Strategic Economics (NJSE) www.strategiceconomics.co.uk
  2. 2. … global context …credit crunch – the sequel EZ/US downgrades & defaults uncertainty of contagion & rescue UK stagflation & rebalancing => low growth outlookexternal imbalances living beyond means, means … structure & competitiveness of economy net external liabilities & banks loss of lenders requires currency release +/or internal deflation
  3. 3. … policy context - UK & SW …National conundrums eliminating the structural fiscal deficit inflation targeting & QE2 “macro-prudentials” new development landscape in England “8”South West “fit” for purpose in this new era? ramifications for innovation & growth
  4. 4. … UK recessions compared …110108 Quarters Output 1980106 Output 1990104 Output 2008, latest qtr 15 = 2011 Q31021009896949290 1 5 9 13 17 21 Num ber of quarters disaster averted … agony prolonged
  5. 5. Input Prices -8.00 -6.00 -4.00 -2.00 0.00 2.00 4.00 6.00 1989Q1 -20 -10 0 10 20 30 401999 Jan 1990Q11999 Jul 1991Q12000 Jan2000 Jul 1992Q12001 Jan 1993Q12001 Jul 1994Q12002 Jan 1995Q12002 Jul Input Prices (LHA)2 1996Q1 Output Prices (RHA)12003 Jan Consumer Prices (RHA)12003 Jul 1997Q12004 Jan 1998Q12004 Jul 1999Q12005 Jan2005 Jul 2000Q12006 Jan 2001Q1 UK real GDP % ch yoy UK real GDP % ch qoq2006 Jul 2002Q1 stagflation …2007 Jan 2003Q12007 Jul2008 Jan 2004Q12008 Jul 2005Q12009 Jan 2006Q12009 Jul … UK output & prices … 2007Q12010 Jan2010 Jul 2008Q12011 Jan 2009Q12011 Jul 2010Q1 0 2 4 6 8 -6 -4 -2 10 12 Consumer Prices and Output Prices 2011Q1
  6. 6. … UK rebalancing …Worrying signs – productivity dropped back this year – flat H1 net goods trade not shifting, though c/a is demand under -ve pressure – home & abroad confidence & real incomes, jobs & savings supply under cost & credit pressures current corporate returns okay, but future uncertain - distorted yield curve/money supplyAt least EZ has started on banks, EFSF & Greece butwhere’s the UK leadership on risk/expectations?
  7. 7. … SW output & employment … PMI Output Index - Latest Month SW UK +/- balance 65 60 55 50 45 40 35 July July Nov Nov Nov Nov Nov Jul Jul Jul May May May May May Jan Jan Jan Jan Jan Mar Mar Mar Mar Mar Sep Sep Sep Sep Sep 2006 2007 2008 2009 2010 2011 falling & relative loss of momentum PMI Employment Index - Latest Month6560 SW UK +/- balance5550454035 July July Nov Nov Nov Nov Nov Jul Jul Jul May May May May May Jan Jan Jan Jan Jan Mar Mar Mar Mar Mar Sep Sep Sep Sep Sep 2006 2007 2008 2009 2010 2011
  8. 8. 0.0 1.0 2.0 3.0 4.0 5.0 10,000 12,000 2,000 4,000 6,000 8,000 0 Dorset Poole Wiltshire BANES Devon CC Level (NSA) September 2010 North Somerset September 2010 BANES Torbay Poole S. BournemouthGloucestershire August 2011 August 2011 Dorset Somerset S.North Somerset GloucestershireGloucestershire Swindon September 2011 Cornwall Wiltshire September 2011 South West Plymouth Bournemouth Somerset Claimant Rate - Not Seasonally Adjusted Swindon Cornwall SW Claimant CountUnited Kingdom Devon Plymouth Gloucestershire Bristol, City of Bristol, City of Torbay
  9. 9. … prospects …the macro/development cycle: 2011/12 private momentum, soft patch, double dip, … depression or recovery … QE & CEreturn to trend v the trend is broken: 2012+ the OBR, deficit reduction & the growth strategy … & M.V = P.Tshort term – low growth : medium term – Olympic relief? : long term - slow return to ‘normal’ – risks?Does growing SW business need support in this era?strategic analysis & advice with practical intervention

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