Replacement demand set to be key source of jobs in West Midlands over next 5 years

An under–representation of higher value added sectors means that the pace of economic growth in the West Midlands over the next 5 years is forecast to be modest. Only 11,000 net new jobs (representing growth of 5% in total employment) are expected to be created between 2010 and 2015.

But the Observatory’s new report The West Midlands economy post recession: key issues and challenges (pdf, 844kb) predicts an additional 860,000 job vacancies are expected to arise between 2010-2015 due to ‘replacement demand.’

It’s estimated that nearly 510,000 jobs (58% of all job vacancies) will be due to labour turnover and more than 350,000 jobs (40% of all vacancies) will be due to older workers retiring.

Pie chart shows overall job vacancies forecast in West Midlands between 2010 and 2015

Text description of this chart available. Chart prepared by West Midlands Regional Observatory based on Cambridge Econometrics forecasts and Office for National Statistics Labour Force Survey.

Replacement demand is forecast to be more significant in traditional private sector industries and public sector activities which have an ageing workforce. For example:

  • 59,000 vacancies are expected to arise in manufacturing
  • 50,000 vacancies are expected to arise in engineering
  • 37,000 vacancies are expected to arise in construction

In health and social care, meanwhile, nearly 70,000 vacancies are expected to arise. The figure is more than 45,000 in education and more than 30,000 in public administration.

Many of the jobs on offer due to retirements are likely to require specific skills, qualifications and experience. Around 90% of these jobs are expected to be filled by people already in employment.

Replacement demand is expected to be even more significant in lower value added private sector industries where labour turnover is very significant. For example:

  • More than 132,000 jobs are expected to be created in the hotels & catering sector
  • 128,000 in wholesale & retail distribution
  • 120,000 in lower value added business services
  • 72,000 in cultural, recreational & sporting activities
  • 53,000 in transport

Significant numbers of the job opportunities are lower skilled and likely to be filled by new entrants to the labour market such as school and college leavers. For example:

  • In hotels & catering nearly 28,000 jobs (21%) are expected to be taken by new entrants
  • 20,000 (15%) in wholesale & retail distribution
  • 10,000 (8%) in lower value added business & professional services
  • Nearly 8,000 (10%) in cultural recreational & sporting activities

Related links

Read more about the future of the West Midlands economy in our report:

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