Slowed economic growth has put back forecasted predictions that city jobs would regain their 2001 peak from 2006 to 2007 and in further bad news for city workers bonus best estimates show a dip from last year.
The projections, from the Centre for Economics and Business Research (CEBR) show that forecasted City job growth for the period 2004-2008 has been revised down from an annual rate of 2.6% predicted in July of this year to 1.5% this week.
Worker numbers will rise by only 4,000 this year compared with a forecasted 8,000 in the summer. This is a marked increase, however, from 2003 when jobs in the Square Mile, Canary Wharf and elsewhere in London totalled 309,000. Numbers employed now stand at 313,000. Incremental growth will see City worker numbers climb from 315,000 in 2005 to 317,000 in 2006; according to the predictions.
Boom areas include fund management rising from nearly 13,000 to 38,000, professional services whose numbers have swelled from 45,000 to 72,000 and international banking, taken together derivatives and foreign-exchange dealing has witnessed a growth from 12,000 to almost 14,500.
Bonus pools also look disappointing with the CEBR predictors reporting that City windfalls will be 2% below their 2003 level.
The reasons for the less buoyant forecast are weaker stock markets, the fall in bond prices and the knock-on impacts on M&A and other City type services, say the CEBR.
The study’s co-author, CEBR economist Andrij Halushka explains:
“The slowing down in the City economy during 2004 means that not only is the short term outlook less buoyant but also the medium term prospects need to be reconsidered. Even so, our forecast that there will be sectoral jobs growth of over 20,000 over the period to 2008 is important. We are not talking about a declining sector here, merely one that might grow a little more slowly than we had previously thought.”
