Page last updated at 14:46 GMT, Tuesday, 26 January 2010

Jobs fear despite recession's end

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Unemployment in Wales rose 50,000 since the recession began

As official GDP figures show the UK economy has moved out of recession, experts warn that Wales faces a "double whammy" of new job losses.

The UK economy grew 0.1% in the last three months of 2009, ending the longest recorded downturn.

But public sector job cuts in Wales may deliver a second round of unemployment, says an economics academic.

Joblessness in Wales rose from 79,000 in July 2008 to 125,000 in autumn 2009, though it has dropped since.

Earlier in January, the motor parts maker Bosch announced the closure of its south Wales plant from next year with the loss of 900 jobs. In 2008, the firm laid off 600 contracted and agency staff at the site.

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Wales' public sector may face job cuts as the wider economy recovers

Nearly 400 well-paid jobs were lost when metal production ended at Anglesey Aluminium in Holyhead, a major employer in the region.

It was the latest of a string of job cut announcements, often hundreds at a time, which include Hoover, L'Oréal, washing machine Indesit and the bakery chain Ferrari's.

However, business leaders have recently claimed "cautious optimism" about the recovery, with the South Wales Chamber of Commerce describing 2009 as "a tough year".

The highlight of the retail year was the opening of the new £675m extension to the St David's centre in Cardiff.

With more than 120 new shops, restaurants and cafes, it was one of the largest shopping centres to open in Europe in 2009.

But reports by the Centre for Cities think tank have warned that Swansea and Newport face particular difficulties in riding out the effects of the recession due to their reliance on public sector employment.

'Double whammy'

Professor David Blackaby, of Swansea University, warned that Wales faces a possible "double whammy" of renewed job losses if expected cuts in the public sector follow hard on the heels of those in manufacturing.

He said: "The real danger looking forward is that people are suggesting it will be a fairly weak recovery, perhaps a 1% GDP growth this year.

"We have also got public sector job cuts on the horizon whichever government gets into power and Wales has more people employed in the public sector than the UK average.

"So if there are job losses in the public sector, Wales may face bigger falls than other parts of the country.

"So we could take a double whammy - hit by manufacturing job losses and public sector job losses as the economy recovers slowly."

The assembly government said the latest statistics were "very encouraging".

Environment Minister Jane Davidson said that the assembly government had taken early steps to address the economic crisis - well ahead of the official start of the recession.

She added that it was now a question of building confidence in the real economy, on the back of the economic growth statistics.

Wales@Work will be examining what next for the economy on BBC Radio Wales at 1830 GMT on Tuesday, 26 January, with guests including Prof David Blackaby.



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