Whoever said 'trust your gut instinct' didn't have my abdomen

Aargh, why is my gut instinct wrong in so many ways.

In a previous post, I had argued that
a) the dip in London employment caused by the current recession would be over by end of next year, and
b) the employment recovery in London would be driven by development from the Olympics and miscellaneous infrastructure works such as Crossrail.
Do you want to guess how my arguments stacked up against professional forecasters? That’s right, zero from two.

As part of my trains role I get access to forecasting data from Oxford Economics UK. I thought I would slice and dice this data to test my statements above.
Central London Employment for the period 2005-2018 according to OEF can be graphed below. (I haven’t quite worked out how to present graphs properly in Blogger, so excuse presentation formatting and double click on graph if too small.)

Peak employment occurred in the second quarter of 2008, and the trough of the recession will occur in the second quarter of 2011.
So my first argument, that the employment drop will bottom out by the end of 2010, is in error. Result.
One other thing to note is that employment will not return to peak 2008 levels until 2016, a lag of nearly eight years.

My second argument was that employment recovery in London will be driven by infrastructure development. If my argument is true, then we would see a surge in transport employment over the period 2008-2012, or possibly construction employment.
The graph below shows Central London Employment for selected industries, for the period 2004 to 2018. Both construction (dark green) and transport & communications (light green) are essentially static over the selected period. Thus my second argument is wrong too.
Business services (brown) rebounds to its 2008 peak by 2014, while financial services (blue) does not recover to its 2008 peak until after 2018. One of the only sectors which is recession proof is Health and education (orange), which is not too surprising.

Moral of the story: If you want to enter the financial services sector at any point in the next ten years, forget it and work in health or education instead.

So what drives the recovery? Business services.
If you look closely at this graph, you will see that I had to put Business Services on a secondary axis (y axis to 900k instead of 400k) to make the picture meaningful. Sure, London has other sectors, but Business Services provides 40% of Central London Employment so other sectors are far less important.

Now all I have to do is find a forecast of equivalent quality for New Zealand / Wellington to chew on.