– NATIONAL CONTEXT
- GDP grew by 0.8 per cent in the second quarter of 2014.
- This means that the UK economy is now 0.2 per cent above its pre-crisis peak in Q1 2008, after the recession shrank the economy by 7.2 per cent.
- Quarterly growth was driven mainly by the service sector (1.0 per cent) and manufacturing (which was weaker at 0.2 per cent). These two sectors combined make up 88 per cent of the UK economy.
- Compared to the same quarter a year ago, each of the main sectors grew by more than 3%. This is the first time this has happened in 14 years (2000Q1).
- Construction has increased 4.2% on a year ago compared to 3.3% for services
- Manufacturing is up 3.3% on a year ago, same as services
- Today’s figures back the IMF’s assessment yesterday that the UK will be the fastest growing major advanced economy in 2014. The IMF upgraded their 2014 growth forecast for the UK by more than any other major economy.
Chancellor George Osborne said:
“Thanks to the hard work of the British people, today we reach a major milestone in our long term economic plan.
“But there is still a long way to go – the Great Recession was one of the deepest of any major economy and cost Britain six years.
[highlight][/highlight]“Now we owe it to hard-working[highlight][/highlight] taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all.”
– STATE OF THE REGION AT A GLANCE
Employment
- Employment is up 64,000 in the region since 2010.
- Private sector employment is up 16,000 since 2010.
- Unemployment is down 5,000 since last year.
- The North East has seen the largest number of jobs created in the country through the Regional Growth Fund – 9,722.
- The region has seen the second highest number of jobs in the country created in Enterprise Zones – 1,569 since April 2012.
Skills
- More than 96,000 apprenticeships have been created in the North East since 2011.
- Provisional figures indicate that more than 21,000 apprentices started in 2013/14 alone.
- The region has the fourthhighest number of positive outcomes for 16-17 year-old NEETs engaged in the Youth Contract in the country – 896 (Sept 2012 – Mar 2014).
Business
- The region is home to more than 135,000 private sector businesses.
- Start-up loans worth more than £4m have been awarded to 971 entrepreneurs to launch new ventures.
- More than 500,000 vehicles were built in the North East from January 2013 to January 2014. Almost 400,000 of these were exported to other countries.
Housing
- Since the launch of Help to Buy in April 2013, 1,422 aspiring homeowners in the North East have bought newly-built homes through the Help to Buy: Equity Loan scheme.
- In the first quarter of 2014, 2,800 first time buyers secured mortgages in the region – a higher figure than seen in Wales, Northern Ireland and the East of England.
– REGIONAL REACTION
- Linda Edworthy, Director of Policy & Strategy, Tees Valley Unlimited Local Enterprise Partnership, said:
“The Tees Valley economy continues to maintain its robust recovery, building upon the strong increase in private sector employment throughout 2013 and 2014. The rapidly growing Tees Valley digital cluster is performing particularly well whilst a number of advanced manufacturing companies continue to make significant investments. This further enhances Tees Valley’s reputation (as recognised in our Strategic Economic Plan) for excellence in oil and gas, subsea, bio-industries and other growing sectors and demonstrates the continued contribution to the UK economy of our world-renowned process industry, with its consistently strong export performance.
“There is further significant investment in Tees Valley to come, including the National Biologics Manufacturing Centre in Darlington and expansion at Teesport, which will enhance this positive environment for business growth and continue to deliver job opportunities for our residents.”
- Graham Robson, Manager of PJA Distribution in Thornaby, said:
“We are extremely confident about the economic recovery. Business is going very well for us, in fact we are currently in the process of re-locating to a warehouse that is twice the size of our current premises. In addition, we are planning to recruit another ten people in the next few months to help with our growth plans.
“Recently, we were honoured to win our category of “Best Newcomer” in the North East Business Awards, both the Teesside heat and the regional final. There were many impressive companies in attendance, and there seemed to be a lot of positivity about the future.”
- Paul Stonebanks, Managing Director of Advanced Industrial Solutions in North Tyneside, commented:
“Today’s figures are great news for Britain and the North East. We are delighted Advanced Industrial Solutions has been able to contribute positively to the economic recovery and we are still growing; Along with investment in our facilities we are creating jobs and upskilling our existing workforce.
“We have invested more than £2.5m in state-of-the-art facilities on North Tyneside, cementing the North East’s reputation as an accessible and affordable training location for industry as well as the global oil, gas, wind and maritime sectors.
“Meanwhile increased business confidence is allowing us to invest more heavily in our people. AIS Group has created 25 new jobs so far this year and plans to take on an additional 25 people within 18 months, doubling our workforce. This investment includes hiring a number of apprentices which we see as critical to the rejuvenation of British industry.”
- Sharon Lane, General Manager of Tees Components Ltd in Saltburn, said:
“During this quarter we have seen increased demand for our heavy engineering services, and are maintaining a steady long-term order book from both domestic and overseas customers. Late last year we secured RGF funding for capital expenditure to significantly grow our capacity. This growth programme is now well underway, and we are starting to see return on our investment as we meet rising demand for very large precision machined components and assemblies.
“The capital investments include a very large CNC floor borer and a 5-axis vertical machining centre, for which we have recruited additional engineers, and we have also recently offered four local young people apprenticeships, starting this month.”
- Julie Price, joint Managing Director of The AMA Group in Peterlee, said:
“For some time we’ve been looking into the possibility of bringing clothing manufacturing back to the area and although many people thought we were mad for even considering it, for a number of reasons we felt the time was right to do it.
“We also knew there was still a huge pool of skilled people out there who we could attract and already, just four months into production, we’ve employed our first 25 people and signed a major contract with Tesco to produce ladies jerseywear for their F&F range.
“There’s no doubt in our minds that our plans will see this area once again become the bedrock of the clothing manufacturing industry, which at its peak employed thousands of people. In fact, we’re so confident we’ve altered our turnover and recruitment forecasts as our initial growth targets were conservative.”
- Peter Walls, Chief Executive, Gentoo Group, said:
“Gentoo is all about people. One of our key drivers is to create wealth that we can reinvest into our communities. We believe that wealth can take many forms and it is as important to improve health, wellbeing, education and the environment as it is to improve GDP. At a national level the economy is improving although we have not yet seen the full extent of the trickle down effects of recovery at a regional level. There are signs of optimism emerging, however with new delivery vehicles and funding streams with a specific economic focus.
“Within the Group we continue to grow our activity. I am delighted we have received further allocation from the Homes and Communities Agency to build a further 170 affordable homes, on top of the 200 affordable homes we will deliver this year. Alongside this there is an increased desire within society for business to act responsibly and our Art of Living programmes have assisted over 20,000 people this year which we see very much part of our core activity. We will continue to make a significant contribution in the region to its economic performance and will continue to deliver our wider societal benefits alongside that.”