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Page last updated at 11:47 GMT, Friday, 6 March 2009

Silver linings to recession cloud

Nick Servini graphic
WELSH ECONOMY UPDATE
By Nick Servini

Estate agent sign
Estate agent Peter Alan says 2009 had a better start than anticipated

BBC Wales' business correspondent gives his latest assessment of the state of the Welsh economy.


Let's start with some positive news for a change.

The biggest estate agency in south Wales, Peter Alan, says it had a better than expected start to the year.

Peter Griffiths, the chief executive of the Principality, which owns Peter Alan, admits that house prices may fall by up to another 10%.

But he says selling prices are now starting to become affordable again, and that's being reflected in an increased number of transactions.

Meanwhile, Penn Pharmaceuticals is creating 133 jobs in Tredegar. For the first time since Christmas, staffing levels at the Ford engine plant in Bridgend are back to normal this week, thanks largely to sales of the new Fiesta.

Behind the headlines there are plenty of stories of companies out there bucking the trend.

But whisper it quietly, because there's a suggestion that some firms almost feel embarrassed to admit being successful at such a difficult time.

There may well be bragging rights among some, but overwhelmingly the positive noises are being drowned out in the recession.

There were some startling figures released by a director at the former Alcan aluminium rolling mill at Rogerstone near Newport this week.

Double whammy

He was unusually frank in explaining why the plant is to close. He said sales are down 60%, while the global price for aluminium has more than halved.

The double whammy means the plant is losing more than £1m a month. A total of 440 jobs will be lost there.

With an average salary of around £30,000 not only will it be difficult for the redundant workers to find anything comparable in terms of pay, it takes out a huge amount of money from the local economy in one stroke.

Indeed, closure, and not mothballing or cuts, has been a running theme this week.

In Bodelwyddan, there are plans to close the Indesit washing machine factory, and the same is happening at the Musashi car parts factory in Blackwood.

Together with Novelis, that's a combined total of 860 manufacturing job losses announced within a 48-hour period.

First Minister Rhodri Morgan and a succession of business leaders continuously speak of the need for Wales to be ready when we come out of recession.

If factories are being closed permanently then it makes that job even more difficult.



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