5.1 Over the last decade, Glasgows economy has experienced significant change. The traditional base of mercantile, engineering and marine activities has been reshaped, other production industries have modernised around new technologies and the service sector has significantly increased its representation. In terms of output, corporate activity, service provision and the labour market, the importance of the Glasgow economy reaches well beyond the City boundary into the wider metropolitan area. Glasgow is the economic heart of Scotland. An economically successful Glasgow will impact positively on the Scottish economy and on the well-being of the country generally.

Daily Record Building - Broomielaw

5.2 The Citys economy has recently been performing as well as at any time over the last twenty-five years, with sustained growth in output and employment since the 1990s. In 1996, the City produced 7.9 billion - some 14.5% of Scotlands Gross Domestic Product (GDP). By 1999, local output had risen to an estimated 10.3 billion, 16.4% of the countrys GDP. Between 1993 and 1998, the number of employee jobs increased from 308,700 to 337,800. In addition, the numbers of self employed increased by 2,700 to around 30,000 (Figure 5.1).

Figure 5.1 : Employment Projections 2000-2008

5.3 Structurally, the economy is now dominated by nonmanufacturing sectors. Service activities, in particular, have largely been responsible for the delivery of growth, new jobs, wealth generation and investment. Between 1993 and 1998, the number of employee jobs in the service sector grew by 31,100, consolidating Glasgows position as the commercial hub of the West of Scotland, with strong development activity evident in business and financial services, tourism, retail and leisure (Figure 5.2). Much of this employment growth was
driven by large gains in female employment and particularly part-time employment. The service sector now provides 75% of male employment and 92% of female employment within the City and generates around 79% of its GDP.

Figure 5.2 : Employment by Sector 1993 and 1998

5.4 In the same period, employment in manufacturing and construction fell by 2,400 and 2,500 respectively. The manufacturing sector, however, continues to represent an important element of the local economy, directly accounting for 9.5% of employment, and generating some 13% of Glasgows GDP.

5.5 During the late 1980s and early 1990s, the shift out of manufacturing led to a contraction of 1.7% in the Citys economy compared with growth in Scotland (+11.0%) and the UK (+5.1%). Growth in services reversed this trend and between 1994 and 1998 the Citys economy grew by 15.9%, against 10.3% in Scotland and 11.4% in the UK. In 1999, Glasgows GDP output growth, estimated at between 2.2%-2.5%, again topped both Scottish and UK levels (around 2.1%).

It is expected that over the short-term, to 2002, Glasgows GDP growth will continue to remain above the levels for both the Scottish and UK economies.

5.6 Recent trends in job growth also look set to continue, with total employment in the City forecast to increase to around 397,000 by 2008. The number of male and female part-time workers is expected to grow strongly, contrasting with fewer full-time jobs. Most of the increases are forecast to be within growing new economy industries such as telemarketing, software, knowledge-based activities and leisure/ entertainment.

5.7 While service sector growth has partly compensated for the loss of manufacturing jobs, the decline of traditional manufacturing continues to influence long-term unemployment. This is particularly noticeable in disadvantaged areas where unemployment remains stubbornly high and social exclusion is a significant problem. By the International Labour Organisation (ILO) definition of unemployment, some 30,000 residents were jobless in Glasgow in the summer quarter 2000. This represented an unemployment rate of 11.1%, compared with 6.8% for Scotland and 5.6% for Great Britain (Figure 5.3). However, over the past 10 years, the number of people claiming unemployment-related benefits in Glasgow has fallen from 49,000 to 21,000. This has been due to a combination of factors including an increasing number of jobs within the City, a fall in the labour force, continued out-migration of population and administrative changes in eligibility for benefit.

Figure 5.3 : Unemployment Rates Autumn 2000(ILO)

5.8 Around half the jobs in Glasgow are now taken by non-City residents. If present trends continue, the proportion of jobs held by non-residents will increase from 50% to 55% by 2007. Out-migration has also had a significant impact on the resident workforce. Only 65% of the Citys working age population is economically active compared with the Scottish rate of 77%. Moreover, a contrast is evident in levels of educational attainment in the workforce. On the positive side, the proportion of employed residents with good qualifications is higher than the West of Scotland and national averages. Compared to surrounding authorities, however, Glasgow also has a higher representation of less skilled residents with educational attainment below the national average and below the levels required by future skills demands.

5.9 There is recent evidence that the City is experiencing a loss of existing jobs to surrounding areas, with many expanding companies relocating outwith Glasgow due to property constraints. These employment opportunities are thought to have attracted many of the Citys economically active population. It is vital, therefore, that Glasgow safeguards and creates employment opportunities in order to support the Councils aim of achieving population growth by the end of the Plan period.

5.10 The retention and creation of jobs in Glasgow, particularly for Glasgow residents, remains a priority for the City. Both the Glasgow Alliance and the Joint Economic Strategy highlight that positive intervention to improve economic competitiveness is required if Glasgow residents are to benefit from the projected growth in employment opportunities. The Alliance Strategy sets a target of 15,000 additional job placements for Glasgow residents by 2003. In order for this to be realised, priority is currently being directed towards increasing the skills level of the workforce and improving the Citys physical infrastructure.

5.11 The restructuring of industrial and business
activity has resulted in substantial areas of the City falling out of industrial/business use. While the growth in service sector employment has been concentrated in and around the City Centre, many of Glasgows traditional industrial and business areas continue to contract. This has contributed to a legacy of vacant industrial/business sites and properties that blight the environment of many areas and have a negative effect on the perception of the City as an industrial/business location. Action to ameliorate the negative impact of these areas is needed.

Industrial Dereliction

5.12 Many of the Citys industrial and business areas are poorly located relative to modern transport infrastructure, offer limited opportunities for expansion and contain obsolete floorspace that is illsuited to modern industries. In many instances, the vacant sites and premises are contaminated from previous industrial operations.

5.13 The City contains significant brownfield opportunities and its industrial and business areas have the capacity to accommodate much of the growth projected in the Joint Structure Plan. It is anticipated, however, that future development pressure will focus on well located, good quality areas that offer good quality premises and the opportunity to expand. Despite the growth projected in the Joint Structure Plan, it is expected that some of the Citys poorer quality, poorly located, industrial and business areas will experience further contraction. In recognition of this, the Council has re-designated several industrial and business areas for suitable alternative uses.

5.14 Vacant sites within industrial and business areas form the bulk of the Citys industrial and business land supply, although there are some sites which lie outwith these areas. The Council seeks to ensure that sufficient land is available for industrial and business development at all times. At present, the Citys land supply is dominated by small sites that often lack the flexibility to attract industrial and business investment. Analysis reveals a concentration of sites of less than two hectares, many of which suffer from infrastructure and physical constraints and require substantial investment prior to development.

5.15 The City does possess some key advantages. It benefits from good transport links, a high level of accessibility and the ability to draw on a substantial supply of labour. These attributes make it an attractive location for industrial/business development, provided good quality sites and premises are available. The shortage of such sites and premises, however, is constraining the growth of indigenous companies within the City and presenting a barrier to the attraction of new industrial/business investment.

5.16 Both the Council and Scottish Enterprise Glasgow recognise these constraints and have embarked on a programme of action that seeks to ensure that the City has an adequate supply of well located, serviced and available industrial and business sites and premises, within an environment that can accommodate both relocating Glasgow companies and potential inward investors.