| Report reflects gloom, but not all doom |
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The South East Economic Development Agency (SEEDA) has published a down to earth snapshot of the South East's economic state of play. Findings suggest the recession is either bottoming out, or businesses are hanging on to survive. The short term is on most people's agenda with cashflow remaining a major challenge. Businesses are beginning to restock and unemployment is slowing. However the manufacturing sector is still being affected more severely than other industries and the rate of job shedding increased in May, while export orders fell at a faster pace than earlier in the year. The volume of output and new domestic orders also fell, but at a slower rate than previously. Most banks are being more helpful but the industries which are being helped least are the furniture and automotive supply chain. Training has been cut back due to lack of funds although there is still a lack of skilled job applicants. Some light in the car industry sees BMW looking to recruit 250 temporary staff at its Cowley car plant in order to reinstate shifts following a rise in demand. Mclaren has unveiled plans to build a sports car factory next to its technology centre in Woking by 2011 with the creation of up to 800 jobs and Rolls-Royce motor cars is to create a further 150 jobs at its factory in West Sussex in order to manufacture the new Ghost model.. A moribund housing market and weak private sector investment continue to weigh heavily upon the construction industry. Revised April data shows that new project starts in the South East fell by a third compared to a year ago. This was mainly due to a halving of housing schemes both private and social housing and a sharp fall in non-residential projects. In contrast, the flow of civil engineering project start ups has picked up sharply since the start of the year, partially offsetting the decline in new building projects. Some retailers, such as discounters or pawnbrokers, are seeing increased business. Garden centres are the winners of the recession as customers opt to ‘grow their own' in the credit crunch and the future looks rosy. Dobbies Garden Centres announced record £1 million sales of its home-grown range this year. This marks an 82 per cent rise in like-for-like sales year-on-year as shoppers look to save money and eat more healthily. Across the business services sector, shrinking corporate budgets and a lack of consumer confidence are causing difficulties for firms in securing contracts, retaining staff and maintaining cashflow. In the IT sector, companies are struggling to win orders which will generate profit, as they are being forced into offering lower prices which are unsustainable. There is evidence of increased recruitment and retention in the care sector as people made redundant from other industries are seeking alternative employment. Many more UK workers are now expressing an interest in working in the care sector, which marks a change from the recent past when the sector relied extensively on migrant labour. There are some positive signs in the transport sector this month: Dover Port's operating profits rose last year despite the economic downturn. Revenue increased by more than five per cent and there was a record number of cruise ship visits, but the freight volumes fell by 2.4 per cent. Reports from Kent Economic Board suggest that the agricultural sector is benefiting from reduced input costs, but horticulturalists are seeing increasing staff costs. There is reportedly now real evidence that activity at the bottom end of the rural property market is starting to increase and demand for commercial property is holding up. |
