'Confidence returning' in region

The number of professionals claiming Job Seekers' Allowance has risen

Businesses in the south east of England have been squeezed by the recession despite being cushioned from the worst of its effects, a report has revealed.

BBC South East has been given access to the latest regional economy report by the South East England Development Agency (Seeda).

It outlines the challenges created by the "unprecedented events" in the global financial markets.

Unemployment levels have risen by 122% but confidence is "returning", it said.

Seeda, a government-funded agency representing Berkshire, Buckinghamshire, Hampshire, the Isle of Wight, Kent, Oxfordshire, Surrey and East and West Sussex, was set up in 1999 to boost the economic regeneration of the South East.

Consumer spending

Its report shows the South East's high concentration of financial and business services and a low level of production and construction firms has had a positive impact on the overall figures for the region.

We are seeing bank lending return to normal and that means we are starting to see some stabilisation in economic activity Paul Lovejoy, executive director of Seeda Region's data masks local issues

However, the majority of businesses surveyed in the South East reported their performance getting worse or remaining stable between December 2008 and February 2009 because of falling levels of activity and business orders.

While manufacturing and construction have been worst hit, 40% of wholesale, retail and hospitality firms have also reported a deterioration caused by drop in consumer spending.

Buckinghamshire and East Sussex were worst affected with about 50% of businesses reporting a drop in performance.

Executive job hunt 'frustrating'

Paul Lovejoy, executive director of Seeda, said the rate of decline had slowed significantly in recent months and confidence was returning.

"We are seeing bank lending return to normal and that means we are starting to see some stabilisation in economic activity but it is at a lower rate and that is why unemployment is continuing to rise," he added.

Despite unemployment in the South East being at its highest level since 1997, at 3% it remains one of the lowest rates in the country.

'Affecting more women'

There were 153,806 people in the South East claiming Job Seekers' Allowance (JSA) in April 2009 compared to 69,105 in April 2008.

Although low or non-skilled workers are the biggest group claiming JSA, the proportion of senior managers and professionals seeking the allowance has risen steeply in the last year.

The Seeda report claims these redundancies have been made to make "considerable savings" but the sudden increase could be partly attributed to high-paid workers initially delaying claiming because they expected to secure new jobs quickly.

'Worst over' for job loss woman

Woman have also been particularly badly hit compared with previous recessions, partly because there are far more in formal employment.

Julie Kapsalis, Seeda's director of business support and enterprise, said: "Women work in slightly different sectors than men and the manufacture and construction sectors, which traditionally more men work in, were hit very early on.

"What we're seeing now is that the retail, service, tourism and hospitality sectors are being hit as the amount of money people are spending is reducing and that is affecting more women."

But she added: "A large number of women who are made redundant are considering self employment and setting up their own businesses which presents a great opportunity for the economy of the South East region."