Page last updated at 09:47 GMT, Friday, 23 January 2009

Recession hits West Midlands hard

By David Green
BBC News, Birmingham

The economic downturn - now confirmed as a recession - appears to have hit the West Midlands harder than most areas of the UK.

Unemployment figures released on Wednesday show the four constituencies with the highest unemployment figures are in inner-city Birmingham while the rate across the region is 7.1%.

Jaguar cars wait for distribution at Castle Bromwich plant near Birmingham
Jaguar Land Rover has been hit by falling car sales

Recent months have seen a spate of job losses across the region's manufacturing base.

The automotive industry - which employs more than 100,000 across the region in vehicle manufacturing and the components sector - has been particularly badly hit.

Aston Martin, in Gaydon, Warwickshire, announced 600 job losses - a third of its workforce - in December.

Jaguar Land Rover, with plants in Castle Bromwich, Solihull, Coventry and Gaydon, cut 450 jobs earlier this month and has severely cut back on production.

JCB, in Rocester, Staffordshire, cut nearly 700 jobs in December.

We really do rapidly need to get credit flows moving within the economy fairly quickly
Chris Clifford, CBI West Midlands
And in Birmingham, van maker LDV cut 95 jobs in November and has not yet set a date for production to restart.

It is a similar tale in the ceramics industry in Stoke-on-Trent, where Waterford Wedgwood, now in administration, has cut nearly 600 jobs since August.

Jesse Shirley and Son Limited also cut 55 jobs earlier this week.

And business leaders have warned the situation is likely to get worse before it gets better.

Chris Clifford, regional director of the CBI in the West Midlands, said: "It's a very, very difficult situation at the moment obviously.

"We really do rapidly need to get credit flows moving within the economy fairly quickly.

"The sooner we can do this the sooner we stand a chance of coming out the other side.

"The longer it takes the longer the recession, I fear."

'Just scandalous'

He added: "It's going to be tough, it's going to be across all sectors, not just manufacturing.

"It's retail, financial services, hotels as well. There are job losses likely in the public sector particularly in local authorities and others."

Wedgwood factory, Barlaston
Waterford Wedgwood has been put into administration

Roger McKenzie, of TUC Midlands, backed businesses' calls for more credit.

He said: "The problem's with the banks. They're quite happy to pass on the interest rate cuts in terms of affecting everybody's savings so our savings are worth nothing but not as fast to pass on mortgage interest rates.

"It's just scandalous. Employers can't get credit and it impacts on everyone in the production line."

He added: "Retail hasn't had it like this before. The finance sector got us out of recession last time but that's not the case this time because they've been hard hit.

"Lots of sectors which haven't experienced this before are now experiencing it."

Tourism boost

But it is not all doom and gloom.

Stratford-upon-Avon, the birthplace of Shakespeare, regularly attracts about two million foreign tourists each year.

William Shakespeare's birthplace in Stratford-upon-Avon
The weak pound could attract foreign tourists to Stratford-upon-Avon

And tourist chiefs predict the weak pound will cause US, European and Japanese tourists to see the Midlands as a bargain destination for a holiday.

Phil Hackett, chief executive of Shakespeare Country, said: "It's going to be the best price for an American visitor to come to the UK since 1976 because of the value of the dollar against the pound.

"People coming in from outside the UK will be injecting extra cash into the economy.

"The only issue we have got is the extent of the economic downturn in other countries.

"How many Americans are thinking of taking a holiday?"

Outside of the big cities in rural Shropshire, the county's chamber of commerce is also hoping that tourism will rise, not least from UK holidaymakers put off by the high exchange rate with the Euro.

Things are bad here too, but while manufacturing in and around Telford has been hit, recruitment actually rose by 6% during the fourth quarter of 2008.

Director Richard Sheehan said: "Because we have a rural community when business is flying we never really see the enormous highs.

"Likewise, when everything's going down rapidly, we don't go into the really bad troughs in most places.

"We tend to be a bit more consistent."

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