News Column

What is in store for the region?

January 29, 2014

WITH unemployment falling, does this mean joy for the North- East? Christmas is behind us and January nearly over. It is back to the business of trying to assess what this year has in store for the region. Last week, the Office for National Statistics (ONS) announced that unemployment across the UK fell from 7.4 to 7.1 per cent. Though it was assumed a fall was likely, the 0.3 per cent drop showed the rapid pace of those gaining employment. Indeed, this was the fastest quarterly decrease in 16 years. As this percentage moves closer to the Bank of England's (BoE) threshold of seven per cent, the likelihood of interest rates rising increases. As Mark Carney , the BoE's Governor, has suggested, once unemployment reaches seven per cent, there will be a review as to whether interest rates need to be increased from their current historic low of 0.5 per cent, though reaching this level does not mean an automatic trigger to do so. As well as strong unemployment figures, other data also seems to be providing an ever-increasing glow for the UK . The International Monetary Fund (IMF) previously estimated that the UK would grow by a mere 1.5 per cent during the course of this year. However, its view has changed, with estimates now being upwardly revised to growth of 2.4 per cent - the healthiest of all the main European economies. With these encouraging signs across the UK of greater employment and stronger growth, is the same story being felt in the NorthEast? Once the unemployment figures are broken down by region, it unfortunately shows that figures in the North-East were marginally up. Still possessing the highest regional unemployment rates, at 10.3 per cent, the ONS reported there are now 135,000 unemployed (an increase of 1,000 from the last released figures). Though the headline figures are not ideal, it is not necessarily all doom and gloom because there are various companies based in the North-East forging ahead, trying to create larger workforces. Vertu Motors , the sixth largest car retailer in the country, based in Gateshead , announced it had created another 100 jobs in the past year. Since 2006, when the firm began, Vertu has been able to grow its workforce steadily from 167 to a healthy 753. In fact, not only has the workforce been growing, but so has its turnover and profit. For the six months to August last year, it achieved record half- year results, increasing turnover by 33 per cent and pre-tax profit by 69 per cent. Also in the automotive sector, Nissan has created another 500 jobs, now the second generation Qashqai model is being built at the Sunderland plant. This mean's Nissan's workforce exceeds 7,000 for the first time. Likewise, Hitachi Rail Europe late last year announced that the company is to develop a plant in Newton Aycliffe, County Durham , to employ at least 730 people when it opens towards the end of next year. Jobs will be created to design, develop and build a number of trains over the coming years. In addition, the project will also have a positive knock-on effect for companies commissioned to build the plant. For example, Finley Structures, also based in Newton Aycliffe, has won the bid to construct the factory's steel frame. Vertu Motors , Nissan and Hitachi are only three examples from a list of companies here in the North-East that are striving to increase the numbers that they employ. Therefore, though unemployment figures for the region have risen, scratch a little deeper and there are always positive elements to find, which should make this year a year to look forward to.

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Source: Northern Echo (England)

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