York’s economic growth has been slowing down over the past few years because of the recession that the United Kingdom (UK) is experiencing which started in the year 2008. The recent percentage change in Gross Domestic Product (GDP) of the UK is at -0.4% (BBC) which indicates that the country’s economy has contracted and has indubitably affected York’s economy.
Major employers in the city of York are York City Council, National Health Service and University of York. York City Council has more than 7500 employees working the government sector. In the midst of the recession, statistic shows that there has been an increase in the average proportion of residents employed in public sector to 33% (York City Council). As public budget will most likely decrease, York City fears that unemployment may increase because there might not be enough funds to pay the employees. In addition, overall income is dropping due to the recession affecting the purchasing power of the people of York, creating demand deficit unemployment. People may not be spending as much money on good and services as their choices are much more limited than before, hence, incurring an opportunity cost because they have to settle for the next best alternative of the things they want to buy. This further exacerbates unemployment in York City. As a result, it creates more strain on the government because they have to channel more funds towards the unemployment benefits.
Although York’s economic growth has slowed, unemployment is still relatively low. It is going against the common trend. Comparing to national average of 8.1% (BBC) unemployment, Vale of York stands at 1.4% (BBC) only. Many believe that York has such a low rate of unemployment because of major industries keeping its economy afloat. These industries are such as tourism, education, retail, finance and insurance sectors.
The key industry keeping York’s economy afloat is tourism. Tourism alone accounts for about 10.7% (York City Council) of employment. In the year of 2011, York city welcomed an enormous amount of more than 7 million visitors (York City Council). With the large inflow of tourists; there was a wide array of choices of basic goods and services such as restaurants and hotels for them. Hotel room occupancy held steady at 79% (Visit York) in 2011. This clearly shows that tourism creates demand in the service sectors but there must be enough supply in this sector to prevent major scarcity. It not only creates jobs but also revenue in York City. In 2008-2009, tourism brought in more than £440 m and supporting almost 23000 jobs (Visit York).
Aside from the tourism sector, the financial and business sectors have grown significantly too to keep the economy of York afloat. In this sector alone, it accounts for 27% (Visit York) of jobs in York. Although there seems to be a huge shift in structure employment towards finance and business sectors, interestingly, the region’s manufacturing industries has not experienced a decline in jobs. York city still considers itself as an industrial, commercial and transport center with traditional major companies in the field of manufacturing,…