In the midst of economic turbulence over the past couple of years, it can be challenging to identify the sectors driving employment growth in the UK. However, one sector that stands out as crucial for the future is the Net Zero economy.
Leeds, in particular, has been thriving in this sector, along with other promising areas such as Software Development, Agency Market, FinTech, and the Space Economy. But what does growth currently look like in the Leeds area?
We’ve talked about the great businesses that Leeds has in our previous blog posts looking at Leeds’ flourishing Net Zero economy. Net Zero is an important sector for the UK, for Leeds, and for our future.
At The Data City, we’re able to get an indication of the other sectors that might be important to Leeds’ future, alongside many other geographies. The ability to do this is in the face of a economically turbulent couple of years, where sectors have declined and rapidly recovered since the start of the pandemic.
By turbulence, we mean that the UK’s employment has varied over the last couple of years. Currently, the UK’s economy is at record levels of employment; by count, there are more people that are economically active in the UK than there has ever been. By proportion, 61.3% of the UK’s population over the age of 16 are in employment as of April 2023. The only time this has been higher in the last 30 years was in February 2020, when it reached 61.9%.
The current picture of record employment compares to 2021, where total employment was about 1 million people lower; 60% of the UK’s population was in active employment at this time.
With this in mind, we’ll take a look at the longer-term trends, based on data back to 2016. We’ll then review monthly data, to understand the current trajectory of sectors such as the Cyber economy. ¹
At the Data City, our measure of growth considers six years of employment data at both company level and at sector level. This enables us to understand what the longer-term trends are.
Leeds’ businesses show promising growth. In areas such as Software Development, Agency Market, FinTech and the Space Economy.
Is Leeds sharing in this success? Yes, it is. Leeds’ businesses show promising growth.
Companies registered in Leeds are growing their headcount at an average of 4.2% a year. While this is similar to the UK-wide average, this summary statistic hides a number of sectors where Leeds is outperforming.
The Top 10 Sectors for Growth in Leeds include Software Development, Fintech and the Space Economy. All these sectors outperform their national averages. In fact, we estimate that nationally, the Cyber sector has declined by 0.6%.
As mentioned above, using the Data City’s growth rate metric allows us to understand the longer-term trends that have been occurring in sectors. To complement this view, we can also use Lightcast’s jobs and skills data, to understand the trends on a month-by-month basis, at a national level.
We analysed data from Lightcast, in conjunction with our bespoke Real-Time Industrial Classifications (RTICs), to understand how hiring was changing across our RTICs right now.
What do monthly job advertisements look like for some of these sectors? In the Agency Market, the number of advertised roles is still elevated over pre-pandemic levels, although the sector is on track to return to normal levels.
Nationally, jobs in the Cyber economy are down below pre pandemic levels, following a peak in 2021. Before the pandemic there was an average of 1,660 postings per month. Since 2022, there has been an average of 1,550 postings per month.
As mentioned before, from our platform, we calculate the national Cyber sector is shrinking at 0.6% per year, with Leeds significantly outperforming with a growth rate of 9.9%.
On the national picture, it’s important to note that advertised job postings are one side of the story. If the number of people leaving the sector is greater than the number of advertisements, employment across the sector will reduce.
Bearing in mind the longer-term trend, and that advertisements across the UK Cyber sector are below pre-pandemic levels, the sector may continue to shrink in size. This is in spite of the significant uptick in advertisements in 2021, which we would have expected to see through data declared to Companies House.
Companies like CLOUDCOCO are at the forefront of growth in Cyber in Leeds, with an estimated growth rate of 183%. Their employee count has increased from 6 in 2019 to 44 in 2021. If this growth has continued, we estimate their headcount could be close to 110 people. Backed by a £5,000,000 IPO in 2018, CLOUDCOCO is one of many companies backing Leeds’ strong growth in Cyber.
Leeds’ success in key sectors such as Net Zero, Software Development, Fintech, and the Space Economy showcases its significant contribution to the UK’s employment growth. While the country is experiencing record levels of employment, Leeds is outperforming in multiple sectors, including the thriving Cyber industry.
The city’s remarkable growth can be attributed to companies like CLOUDCOCO, which have spearheaded the expansion of the Cyber sector. As Leeds continues to flourish, it solidifies its position as an economic powerhouse and a driving force behind the UK’s future prosperity.