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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
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