Transcript Slide 1
The Recession: Challenges for Maidstone Michael Owens, Shared Intelligence 23rd May 2009 Today’s Presentation 1. The Global Recession – overview and how we got here 2. The Impact in Maidstone – what we know, what we don’t know 3. Implications for the LSP- what should we be doing differently? Recession Timeline 2007 April Sept US Subprime problems ‘Credit Crunch’ US Homeowners began to default on their mortgages. Banks and investors suffer across the globe. Run on Northern Rock Banks worry other banks will survive, won’t lend to each other, credit flows dry up. Jan Stock markets nosedive Global stock markets, including London's FTSE 100 index, suffer their biggest falls since 2001. April UK house prices fall Sept The eye of the storm OctNov Govt rescue packages 2008 2009 Jan Apr UK officially in recession $1.1trn G20 package Fannie Mae and Freddie Mac – which holds 80% of US mortgages - rescued by US Govt. Lehman Brothers declared bankrupt AIG – the US’s largest insurer – saved from bankruptcy HBOS taken over by Lloyds TSB UK government announces £50bn rescue package, VAT cut to 15% UK fourth quarter GDP falls by 1.5%, second consecutive quarter of negative growth. Interest rates The recession is global… UK economy officially in recession Government’s stimulus package Monetary policy – interest rates at historic low levels. Fiscal policy - Spending our way out of recession. Various Government support packges for: • Jobs • Homes • Business • Personal finance When can we expect recovery? Differing views Optimistic – it’ll be over by Christmas 2009, Darling. Pessimistic – output will continue to decline in 2010 (IMF) …but some signs of ‘green shoots’? The fall out…. Issues to consider today… • Business – Small, medium and large • Property market– residential and commercial…implications for regeneration • Labour market – unemployment • Social impact – personal finances, unemployment 2. The Impact in Maidstone Limited amount of data available Unemployment House prices Local intelligence key to understanding the impact What are local businesses telling you? What are local surveyors saying about the property market – commercial and residential? Are social services reporting concerns? Housing Market House prices down significantly Labour Market Unemployment has more than doubled…. But from a relatively low base…. Labour Market Vacancies growing?? Longer term employment forecasts • Experian has revised down its long term employment forecasts for the South East. Forecast Date South East Total Employment 2006-2020 Autumn 2006 480,750 Spring 2008 404,831 Autumn 2008 250,456 Forecast down by almost 50%! How many fewer jobs expected in Maidstone? Will it be more or less exposed? Sheltered from the Storm? Yes? No? Large proportion of employment in the public sector. Commuters to London at risk from financial services slowdown. Less exposure to decline in struggling manufacturing sectors, e.g. cars. Large proportion of employment in construction Few large employers at risk? Large professional services sector, those serving external markets could be affected. Population well skilled and therefore adaptable. 3. What should we be doing differently? Global economic conditions are beyond our control but there is an important local dimension… The IDeA Recession Guide described 5 key steps: 1)Leading and communicating a coherent local response to the recession 2)Using your response to shape the new world 3)Gathering intelligence on the local impact of the recession 4)Building a local plan of action 5)Responding to the new pressures on your council & 1 Fitzroy Square London W1T 5HE [email protected] 020 7756 7600