06 Sep International and EU: 2018 growth segments
The 2018 cycle isn’t over yet, but the outcomes are becoming clear. Mark Corver updates our forecast models, confirming that International and EU students are the growth areas universities need to think about.
UCAS’ excellent daily clearing analysis stopped last week, with the last output covering placed students up to the end of 2 weeks after A level results day. Many universities are still very active in recruitment and something like another 15,000 students in total will be processed through UCAS, typically split around 50/50 from remaining ‘Main scheme’ applicants and new ‘Direct to Clearing applicants’. By the end of the cycle there will typically be an additional 25,000 recruited students reported to UCAS by universities through the ‘record of prior acceptance’ (RPA) route.
Though by this point most of the data is in and the uncertainty in the critical final figures has diminished. We’ve re-run our forecast models for likely ‘End of Cycle’ (EoC) recruitment for students from outside the UK using these latest data. We’ve also added in an estimate of overall totals that include direct to clearing and the (notoriously variable) RPAs. What can’t be measured is FT UG recruitment that is not reported to UCAS in any form. It is hard to say much about this. If it is increasing in the way that many in the sector perceive then it would lead our analysis to underestimate the strength of growth in these segments.
International first. Here we are expecting 2018 to see 37,000 international students from the main scheme, rising to around 41,000 in total (once the anticipated direct to clearing and RPAs are added in). Both would set new records for recruitment recorded by UCAS. You can see from the model predictions in previous years that forecasts based on this point have been pretty accurate for the main scheme figure but less so for the total figure (due to the variability of the RPAs). In both cases the historic fit is slightly flattered as the data has helped shape the model formula. This forecast is almost identical to the one we did based on Scottish results day.
As a university we would suggest a general benchmark for main scheme international recruitment 2018 of +4%, if your recruitment is more than this you will have gained market share relative to the UK as a whole. International recruitment is quite stratified by type and location of institution, as well as portfolio provision. We use weighted composite benchmarks with universities who want a more like-for-like benchmark.
The models for EU recruitment are pointing to an End of Cycle total of 29,700 from the main scheme and perhaps 31,300 in total. Both of these would be increases from last year, but it looks like they will fall a fraction short of high point in 2016. It would though reflect a resumption of the growth trend since 2012 (albeit at a slower pace) and be the second highest recruitment level on record. In previous years the variability from a forecast at this point has been fairly limited. For universities looking for a general benchmark for their EU recruitment numbers in 2018 we would suggest +2% (again, go to a weighted benchmark if you want to control for other factors).
International and EU will be the strongest growing domicile segments for UK HE in 2018, unless there are some pretty exceptional changes in RPA reporting this year. ‘Not EU’ looks like the stronger of the pair. We would suggest universities balance two things in their response to this. Although these segments are growing, they are small (averaging around one in seven of placed students) compared to UK recruitment. The expected increase in international and EU this year is just over 2,000, equivalent to a move of only around half a percent in UK recruitment. So don’t give these segments disproportionate attention at the expense of a correct focus on core UK recruitment.
But the data does continue to point to these segments being a source of demand growth over the next few years, especially valuable at a time when UK demand is likely to be flat at best. So these segments shouldn’t be overlooked either (or, worse, subject to undue pessimism).
Where this balance falls will depend on what type of university you are. Larger providers in England and Wales who already have the scale of substantial non-UK numbers would be good candidates for building on these trends.