PwC: Northern Irish economy sees modest recovery

10 April 2015 Consultancy.uk

The Northern Ireland economy has seen a slow pickup following the economic crisis. However, the recently released ‘NI Economic Outlook’ from PwC highlights that NI continues to face difficult times. While total employment is up 3.4% since 2012, average earnings in real terms have decreased by 2.2% since last year.

The PwC report highlights that in terms of an overall snapshot of the near term economic outlook of Northern Ireland (NI) there is a considerable discrepancy with the wider UK. Over the past three years growth is consistently almost 1% behind that of the UK as a whole, with the smallest difference projected in 2015 at 0.8% less than the UK’s 2.5% growth. 

NI and UK growth projections

Employment market
While there is good news for NI as the number of people on an unemployment benefit declined by 11,400 to 46,200, reducing to 5.2% of the percentage of NI population, the number remains more than twice the UK’s 2.4% average and is consistently the highest of all 12 of the UK regions.

The unemployment rate in NI stood at 6% for the period November 2014 to January 2015. Although this is a 1.5% fall compared to last year and 0.3% to the previous quarter, it is still slightly higher than the UK average of 5.7%. 

Unemployment claimant rates

In general, job growth in NI has improved by 3.4% from 700,150 to 723,670 between December 2012 and December 2014. In that period, the Pharmaceutical Products sector saw the biggest growth, at 12.1%, while the Energy and Waste saw the biggest drop of -9.0% of employed 5,670 to 5,160. The Business Services sector saw growth of 3.7%, increasing from 33,470 to 34,710. PwC notes the relatively strength in consulting growth in the previous twelve months helped buoy the sector, with Kainos announcing 403 new jobs, PwC announcing an additional 807 jobs, while EY, Citi and Deloitte unveiled recruitment plans for 486, 600 and 338 new employees respectively.

While employment is up since 2012, the consulting firm finds that average earnings in the year to April 2014 were declining in cash terms, down by 2.2% while the rest of the UK experienced a nominal growth of 0.6%. According to the authors, “these data indicate a worrying trend. Northern Ireland's overall employment is increasing, but is not being matched by either growth in average wages or increasing productivity.”

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Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”