Coach firm finds a road to recovery

WELSH ECONOMY UPDATE By Nick Servini

1 December, 2008: The calls that can end in tears 8 January, 2009: Spotlight on shops as gloom grows 23 January, 2009: Jobs are there - but at a price

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

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There won't be any comfort this week from the latest unemployment figures in Wales.

It puts the number of people out of work at 100,000 for the first time in a decade.

But perhaps what is more interesting is what is happening elsewhere.

The 7% unemployment rate is less than London, which will be exposed to the meltdown in financial services, the West Midlands, which is similarly exposed to the problems in the car industry, and the north east and the north west of England.

Behind the scenes there are huge efforts going on to try to hold on to key staff. Four day weeks are becoming increasingly common, particularly in manufacturing.

On the one hand, at least it does mean that the staff are holding onto their jobs, while on the other they are losing a fifth of their pay. Take away the mortgage and all the other bills and for many people that is much of their monthly disposable income gone.

The much-vaunted Proact scheme from the assembly government should help firms here. It makes a contribution to both the wages and training costs of staff already on short-time working.

As one managing director of a car components firm told me, it offers some light at a time when there's not much of it around.

Four-day week

This isn't just a blue collar recession.

Hugh James, the biggest legal firm based in Wales, is shedding around a tenth of its workforce, while the accountants KPMG are offering their staff the choice of a four-day week or a partially-paid sabbatical of up to 12 weeks.

But despite the focus on recession and unemployment, it's easy to assume - wrongly -- that every company in Wales is struggling.

Take Edwards Coaches, based near Pontypridd, one of the biggest coach tour operators in Wales.

On many levels you'd expect a company like that to be finding things tough at the moment and yet on the contrary the business is doing well. One reason is that with interest rates so low, people can't see the point in keeping their money in the bank.

It's not often that crime and gas-fired power stations are considered fantastic news.

But purely from a jobs perspective they are in Wales at the moment with the announcements that a prison is going to be built near Caernarfon and power station in Pembrokeshire.

Admittedly these are projects that won't happen in the next six months but in the long run they will offer employment. In the current climate, people will take whatever they can get.