Transcript Recession
The Current Economic Position and Trends in Walsall Clive Wright Director, Walsall Partnership 26 January 2009 Economic Position - GDP Recession is defined as two negative quarters of GDP growth. GDP contracted by 0.6% in the third quarter of 2008, down from 0.0% in the second quarter of 2008. Figures released last week show a further drop of 1.5%, thus making the recession ‘official’. Other economic indicators show the extend of the problem. Source: ONS Balance of payments and trade The UK's deficit on trade in goods and services was £4.5 billion in November, compared with the deficit of £3.9 billion in October . The surplus on trade in services was £3.9 billion, compared with £3.8 in October. The deficit on trade in goods was £8.3 billion, compared with the revised deficit of £7.6 billion in October. Source: ONS Prices and inflation Consumer Price Index (CPI) annual inflation – the Government's target measure – was 3.1% in December, down from 4.1% in November. ‘Clothing and footwear' made the largest downward contribution to the change in the CPI annual rate. Transport costs declined largely as a result of the fall in the price of fuel between November and December. Source: ONS Labour Market There has been a fall in the number of people in employment and the employment rate. The number of unemployed people, the unemployment rate and the claimant count have all increased. The number of vacancies has fallen. Growth in average earnings including bonuses has fallen. Source: ONS Manufacturing production Manufacturing output decreased by 3.3 per cent in the three months to November 2008. Within this the most significant decreases were: 4.9 per cent in paper, printing and publishing, 5.7 per cent in the transport equipment industries 5.7 per cent in the basic metal and metal products industries. . Source: ONS Service output Services output fell by 0.2 % in the three months to October. Distribution output fell by 2.5%; the most significant falls were in wholesale and motor trades. Hotels and restaurants output rose by 0.2% Transport, storage and communication output increased by 0.4% Business services and finance output fell by 0.2%. Government and other services output rose by 0.6% Source: ONS Employment Structure - Walsall Walsall W Mids GB 30 25 20 15 10 5 er ot h v se r pu bl ic an ce om an s+ c tr Source: NOMIS fin m s ib di st r co ns t m an uf 0 Local Impact - Vulnerability Vulnerability to the Credit Crunch 120 100 80 60 40 20 0 Edinburgh Bristol Manchester B'ham Dudley Index, GB=100 Source: Oxford Economics/ Black Country Observatory W'ton Sandwell Walsall Local Impact - Business Black Country Chamber of Commerce Economic Survey: 51% of businesses experienced falling UK sales compared to 32% last quarter. 15% of businesses experienced falling overseas sales compared to 8% last quarter. Cashflow worsened for 44% of businesses. 20% of businesses expect their prices to fall in Q1 2009. Recruitment & Training 35% of businesses reduced their workforce (16% expected to in Q3) . Professional/managerial and skilled manual/technical the most difficult to recruit. 22% of businesses expect to decrease investment in training and PME, compared to 10% in the last quarter. Business Concerns Half expect a decrease in turnover in the next quarter. Inflation remains the biggest concern for businesses but there has been an increase in concerns over levels of competition. Source: Chamber of Commerce Local Impact - People Number JSA Claimants April 5658 May 5640 June 5654 July 5844 Aug 6115 Walsall Sept 6402 W Mids Oct 6660 Nov 7335 Dec 8146 6 5 4 3 GB 2 1 0 Apr08 May08 Jun08 Jul-08 Aug08 Sep08 Oct08 Nov08 Dec08 Workshop What are the long term implications of current economic trends and what do they mean for Walsall? What information do we need to fully understand the recession and its impact? What can your organisation contribute to this? What action can we take now?