Performance of GLA Economics' employment projections - 2020 update

Current Issues Note 61 assesses the relative performance of GLA Economics’ long-term employment projections against the latest ‘actual’ jobs estimates from the ONS and with employment forecasts produced by three external organisations.

GLA Economics has produced long-term projections of London employment since 2002. These trend-based projections are designed to provide a guide to the long-run (approximately two decades) path of employment based on the historic data available at the time of construction.

In common with forecasts produced by external organisations, our employment projections have tended to exhibit a downward bias in recent years (i.e. our employment estimates have been consistently below outturn). This is due in part to upward revisions to historic jobs data, which can be substantial. But it also reflects the unusually rapid growth in jobs relative to economic output in the post-financial crisis period – the so-called ‘productivity puzzle’.

When comparing our projections for employment growth with the latest outturn data, our projections perform reasonably well compared to forecasts produced by other organisations. They do relatively well on key measures of accuracy and bias, particularly in terms of projected annual rates of growth. The accuracy of our long-run projections also tends to improve the longer the time period over which they are analysed.