Download 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?