1. Economic Prospects 2012 Onwards
VENTUREFEST
Bristol & Bath Science Park, 3rd November 2011
Nigel F Jump
Visiting Professor in Economics, University of Bath
Nigel Jump Strategic Economics (NJSE)
www.strategiceconomics.co.uk

2. … global context …
credit crunch – the sequel
EZ/US downgrades & defaults
uncertainty of contagion & rescue
UK stagflation & rebalancing
=> low growth outlook
external imbalances
living beyond means, means …
structure & competitiveness of economy
net external liabilities & banks
loss of lenders requires
currency release +/or internal deflation

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. … UK recessions compared …
110
108 Quarters
Output 1980
106
Output 1990
104
Output 2008, latest qtr 15 = 2011 Q3
102
100
98
96
94
92
90
1 5 9 13 17 21
Num ber of quarters
disaster averted … agony prolonged

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
40
1999 Jan
1990Q1
1999 Jul
1991Q1
2000 Jan
2000 Jul 1992Q1
2001 Jan 1993Q1
2001 Jul
1994Q1
2002 Jan
1995Q1
2002 Jul
Input Prices (LHA)2
1996Q1
Output Prices (RHA)1
2003 Jan
Consumer Prices (RHA)1
2003 Jul 1997Q1
2004 Jan
1998Q1
2004 Jul
1999Q1
2005 Jan
2005 Jul 2000Q1
2006 Jan 2001Q1
UK real GDP % ch yoy
UK real GDP % ch qoq
2006 Jul
2002Q1
stagflation …
2007 Jan
2003Q1
2007 Jul
2008 Jan 2004Q1
2008 Jul 2005Q1
2009 Jan
2006Q1
2009 Jul
… UK output & prices …
2007Q1
2010 Jan
2010 Jul 2008Q1
2011 Jan 2009Q1
2011 Jul
2010Q1
0
2
4
6
8
-6
-4
-2
10
12
Consumer Prices and Output Prices 2011Q1

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 supply
At least EZ has started on banks, EFSF & Greece but
where’s the UK leadership on risk/expectations?

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 Month
65
60 SW UK +/- balance
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

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. Bournemouth
Gloucestershire
August 2011
August 2011
Dorset
Somerset
S.
North Somerset Gloucestershire
Gloucestershire Swindon
September 2011
Cornwall Wiltshire
September 2011
South West
Plymouth
Bournemouth
Somerset
Claimant Rate - Not Seasonally Adjusted
Swindon
Cornwall
SW Claimant Count
United Kingdom
Devon
Plymouth
Gloucestershire
Bristol, City of
Bristol, City of
Torbay

9. … prospects …
the macro/development cycle: 2011/12
private momentum, soft patch, double dip, …
depression or recovery … QE & CE
return to trend v the trend is broken: 2012+
the OBR, deficit reduction & the growth strategy
… & M.V = P.T
short 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