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Employment growth increased as businesses recovered from Covid-19 lockdown, new data shows

Published 08 August 2022

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Employment growth increased as businesses recovered from Covid-19 lockdown, new data shows

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Employment growth rates increased across Greater Cambridge as businesses began to recover from lockdowns and learned how to live with Covid-19, new data shows.

Corporate employment grew in the Greater Cambridge area from 3.6% in 2019-20 to 5.4% in 2020-21 as businesses began to adapt to a new way of working in a post-pandemic world, and Greater Cambridge’s innovation clusters were particularly well positioned to respond to new market opportunities. This was demonstrated by the performance of Knowledge Intensive (KI) sectors, where growth accelerated from 6.8% in 2019-20 to 9.7% in 2020-21.

Non-KI sectors showed a more modest employment growth of 0.7% in the last year, up slightly from 0.4% in the previous year. However, this increase was inflated by the education sector – without it, non-KI employment would have regressed (-2.7%).

Life sciences and healthcare (+16.6%), which supported the fight against the virus, and information technology and telecoms (+11.1%) – which benefited from the increase in remote communications, gaming and internet security – were the fastest growing sectors.

Many service sectors suffered reduced demand as a result of the impact of Covid on their businesses. Employment growth to 2021 declined in six of the nine non-KI sectors, with ‘other services’ – hotels, pubs and restaurants – experiencing significant decline (-5.3%).

Notably, the pre-pandemic norm of Greater Cambridge businesses’ turnover growth outstripping their employment growth returned to our city’s economy for this first time in this data release. This suggests that we have passed a significant recovery milestone as we consider how to plan ahead for the sustainable and inclusive growth of our region.

Within the sample of KI companies, turnover rose from £1,093m to £1,347m (+23%) in the 2021 recovery after experiencing a decline in the previous year.

The report says this shows a renewed confidence among KI companies, which is partly due to demand returning and ‘partly companies learning how to manage the impacts of the pandemic’.

Cllr Elisa Meschini, Chair of the Greater Cambridge Partnership’s Executive Board, said: “This latest data further demonstrates the remarkable resilience and buoyancy of the Greater Cambridge economy, with a rapid recovery of turnover and employment growth in the post-lockdown period of the pandemic. It is vital the GCP pushes on to deliver our major transport schemes and skills programme to support our businesses, residents and the workforce.”

Jane Paterson Todd, Chief Executive of Cambridge Ahead, said: “The results suggest that Greater Cambridge corporate employment has started to recover from the worst impacts of Covid. Whilst non-knowledge intensive sectors continued to show modest growth during 2020-21 – and would have suffered larger falls in employment without the furlough scheme – knowledge intensive sectors achieved faster growth compared with 2019-20 as the local economy came out of lockdowns. The analysis of interim reports also reveals a marked improvement in business confidence amongst these KI companies.”

The research – funded by the Greater Cambridge Partnership and Cambridge Ahead – was carried out by the Centre for Business Research at the University of Cambridge.

It is the sixth update looking at employment growth rates in the region. It covers the accounting year ends between April 2021 and December 2021, and is based on a sample of companies representing 70 percent of corporate employment in Greater Cambridge.

The research forms part of annual reporting of all corporate employment across the wider Cambridgeshire and Peterborough region.

To read the report in full visit the Greater Cambridge Partnership research and evidence page