v 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.
“Now we owe it to hardworking 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.”
v STATE OF THE EAST MIDLANDS AT A GLANCE
Employment
- More than 2.2 million people over 16 are in employment, an increase of 133,258 since 2010.
- More than 1,600 have gained employment through the Regional Growth Fund.
- Between April 2012 and March 2014, 640 jobs were created in the region’s Enterprise Zones.
- Private sector employment has increased by 62,000 since 2010.
- The youth claimant count is down by 11,500 since 2010.
Skills/education
- 171,070 apprentices have started since 2010.
- Higher education application rates for 2012-13 were 31.2%
- 488 Academies have opened since 2010.
Housing
- In the first quarter of 2014 there were 4,800 first time buyers.
- The average house price in May 2014 was £180,462.
Business
- The value of orders for new construction infrastructure projects in the first quarter of 2014 was £145 million.
- More than 179,000 vehicles rolled of the region’s production lines between January 2013 and January 2014.
- The number of vehicles exported in the same period was 188,000.
v REGIONAL REACTION
- Mark Dorsett, UK Country Director for Caterpillar Inc:
“Caterpillar considers the UK as an important part of its global organisation and welcomes the actions taken by the government to make the UK a more competitive place for inward investors to do business. Caterpillar manufactures a wide range of products from 20 facilities. A significant percentage of what is manufactured is exported.
“As the UK economy has improved, Caterpillar has continued to invest in R&D, employee development and its award-winning apprentice schemes. Caterpillar now employs around 10,000 people, with many more employed by its UK dealer Finning and our supply chain.
“In the East Midlands, we have a facility in Desford, Leicestershire, which manufactures building construction products and we attribute much of our success in the region to our people. Our Desford facility has recently been awarded the Queens Award for Industry for the sixth time since the award’s inception in 1966. In addition, our successful relationship with Loughborough University continues to flourish with the Caterpillar Foundation sponsoring a number of scholars as a key partner university.”
- David Ralph, Chief Executive of D2N2, the Local Enterprise Partnership for Derbyshire and Nottinghamshire:
“The local economy continues to gain momentum and it is very positive to see the progress the economy has made over the space of 12 months.
“Confidence among business is rising all the time and the economy is showing signs of moving in the right direction but there remains a lot of hard work to do.
“This month, EPM: Technology is moving into a bespoke state-of-the-art manufacturing, research and development centre in Raynesway, Derby, thanks to funding from the Derby Enterprise Growth Fund (DEGF) to help with expansion plans.
“The plans will double the existing capacity and will allow the company to double its current workforce of 75, which is a great example of how Regional Growth Fund money is working to grow the economy.
“Our own RGF programme, Unlocking Investment for Growth, has created more than 250 jobs with hundreds more in the pipeline in the coming months, with SMEs from all four corners of our patch set to expand their workforce thanks to our help through grant funding.
“MediCity opened its doors in our Enterprise Zone at the end of last year and already, 20 companies have moved in to provide a welcome boost, bringing a further economic boost for the area.
“We recently secured our Growth Deal with Government and £174.4m over six years from the Local Growth Fund, which will see a number of priority projects start to take shape from next year.
“Only by working with businesses, stakeholders and partners and them working with us will we meet those ambitions to secure our key, crucial aims – to make D2N2 a more prosperous, better connected, and increasingly resilient and competitive economy and show just why D2N2 is the UK’s Most Inspirational Postcode.”
- Tim Bagshaw, Head of Investment at Northamptonshire Enterprise Partnership (NEP) said:
“Support for small and medium sized businesses (SMEs) is essential to continued growth across the UK. The Growth Hub is a good example of Northamptonshire’s support for SMEs, the majority of calls coming from businesses looking for start-up support. In total, 500 businesses have been supported through the Northamptonshire Growth Hub, which facilitates access to a broad range of support – including funding and the county’s best trainees, apprentices and graduates – via a single telephone number.”
- One third of callers are looking for start-up support
- 25% are looking for access to finance
- 20% are looking for business planning help
- Junaid Makda, Marketing Manager at Leicester-based engineering company Nylacast:
“As an indigenous UK manufacturer with a global footprint, Nylacast have shown continued growth and increased turnover during Q2 2014 which is forecast to amplify over the year. Delivering high quality engineering solutions to key industries globally results in over 80% of our products and services continuing to be exported to over 43 countries.
“With higher production levels reflected by a greater demand for Nylacast solutions, staff numbers have also climbed, now currently employing 385 members of staff worldwide with a very high percentage of these being based in Leicester, UK. 2014 will also see 6 to 12 young, enthusiastic students join one of our award winning Apprenticeship, Training & Development programs housed in Nylacast’s newly invested on-site training Academy, which is also fundamental in aiding the harvesting and nurturing of talent from within the current workforce, across all areas of the business.
“The Nylacast Academy not only positions us on the frontline of combating the UK skills shortage, along with investment in new machinery and technology the efforts illustrate the dedication which Nylacast have on the continuous development of our core assets; People, Polymers, Passion.”
- Nick Pulley, Chair of the Leicestershire LEP:
“Through recent local business surveys we have seen an increase in sales activity, overseas exporting and improved cash flow. Local businesses are generally confident that their turnover and profitability will continue to rise, moving forward.
“We can also be encouraged by the fact that unemployment in Leicester and Leicestershire is falling with the increase in private sector recruitment that we are witnessing.
“This trend is mirrored in our Regional Growth Fund grant scheme. This flexible, competitive £3.2 billion national Government fund, supports projects and programmes that are using private sector investment to create economic growth and sustainable employment. Already in Leicester and Leicestershire, we have given out over £5 million in grants to over 66 local businesses, creating or safeguarding 1819 jobs and leveraging over £21.5 million of private sector investment.
“This encouraging activity reflects the reality that businesses in our area are investing and expanding.”
- Peter Lister, Operations Director for Nottingham-based Scientific Laboratory Supplies, the UK’s largest independent supplier of scientific equipment, chemicals and consumables:
“The second quarter of 2014 saw continued sales growth at Scientific Laboratory Supplies Ltd and we closed our 2013/14 financial year some 15% ahead of sales in the previous 12 month trading period. A solid growth of almost 10% in domestic sales was topped by increases in international business of almost 70%.
“SLS is now preparing to take on management of the sole supply of laboratory consumables to public sector labs under an agreement awarded by the UK Shared Business Services (UKSBS). This contract is due to go live in Q3 and has already provided additional employment at our Nottingham HQ. The company employs over 160 people nationwide and expects further job opportunities to become available in Nottingham as result of the UKSBS award.”
- David Browning, Director of MediCity, the health, beauty and wellness innovation hub based on the Boots site in Beeston, which lies in the Nottingham Enterprise Zone. The rapidly-expanding business incubator started to attract both start up and growing companies in February this year.
“MediCity is uniquely positioned to provide a stimulating and supportive business development environment for innovators in consumer healthcare, medical technology, diagnostics, and beauty products. We are currently supporting twenty businesses in a number of health-related areas including clinical diagnostics, human performance, body-care, apps for remote health monitoring, water purification and human regenerative medicine. I know several firms have already found opportunities to collaborate and to share expertise, something MediCity actively promotes.”
- Paul Griffiths, Chief Executive of Northamptonshire Chamber of Commerce, said:
“Business confidence is a significant factor in re-building the economy and we know there is a high level of optimism and enthusiasm demonstrated by firms in Northamptonshire.
“Our own local Quarterly Economic Survey for Q2 of 2014 shows companies are experiencing growth and creating more job opportunities locally, with the rise more visible in the manufacturing sector.
“Statistics from the independent report reveal that 97% (up from 92% on Q1) of the manufacturing respondents’ workforce had increased or remained the same in Q2, out of this 64% expected their workforce to increase over the coming three months.
“Furthermore, the survey also showed firms continued to trade strongly in national and overseas markets which give us more reason to believe the Northamptonshire economy is turning a corner.
“We look forward to seeing more companies grow and thrive, which will in turn lead to wealth and prosperity.”
- Dr Rifat Chalabi, CEO of Nottingham based Chinook Sciences, said:
“There is really positive momentum in both the UK and international markets, with our recent successes bringing significant benefits to the environment and employment. More than £100 million has been invested in the plant we are commissioning at Oldbury in the West Midlands to process 160,000 tonnes of industrial waste each year that would otherwise go to landfill. This plant will recover 10,000 tonnes of recyclable metal from this material, have an installed generating capacity of 40 Megawatts of electricity, and is creating 55 permanent jobs. We have a number of similar plants under development in the UK over the next couple of years with more than £500 million being invested to enable valuable resources and energy to be recovered cleanly and efficiently from the UK’s waste.
“We recently started work on a £300 million plant in Sharjah in the UAE where we are building the world’s largest municipal waste gasification facility, and expect to announce further major international projects later this year.
“This strong growth is set to create at least 200 new UK jobs over the next two years, and will secure a further 650 jobs in our supply chain. We expect half of these new jobs to be in the East Midlands, some directly for Chinook and others within our wider UK supply chain, which supplies more than 90 per cent of our technology. Some of our key suppliers will see their workforces double on the back of these successes.
“The ongoing support we receive from the UK Government, specifically from UK Trade and Investment, UK Export Finance and HM Treasury, is essential to our success.”
