Jobs and growth figures from Wales and Scotland deepen the gloom

Figures from the Office for National Statistics have shown that between the peak of the economic boom in 2005 and depths of the recession in 2010, employment rates in Wales were worst effected than any other of the UK nations.

The ONS statistics show unemployment increased by 4.9 per cent within the period, from a low of 4.4% in July 2005 to a peak of 9.3%. The figures also show Blaenau Gwent in Wales had some of the highest rates of Jobseekers Allowance claimants over the same period, hitting 8% in March and April 2009, and January 2010.

The data covers a period when Wales lost significant numbers of manufacturing jobs with the closure of the Bosch car parts factory near Cardiff in January last year seeing 900 jobs lost. In March 2009, workers at the Hoover factory in Merthyr Tydfil carried a mock grave to mark the end of washing machine manufacturing at the site, with the loss of more than 300 jobs.

January 2009 saw 500 jobs lost with the closure of smelting operations at  Anglesey Aluminium, whilst 305 workers found themselves without jobs as a result of the ending of Italian white goods maker Indesit’s operations at its Kinmel Park plant in Bodelwyddan, North Wales.

The figures do, however, show that since the unemployment peak in March 2010, and the latest period for which figures are available over the period of March to May 2011, unemployment  has fallen by 1.4%.

Picking up on the 1.4% figure, a spokesman for the Welsh Government argued it was a sign things were improving, saying:

“We are working with all sectors in Wales to create a strong and vibrant Welsh economy.”

Across the rest of the UK, the ONS reported that:

• In England, unemployment rose from a low of 4.6% in March 2005 to a high of 8% in October 2009, now standing at 7.8%;

• In Scotland, unemployment from the low to the high increased from 4.8% to 8.9% in July 2010;

• In Northern Ireland rates increased by 4.7% between August 2005 and March 2010 to 8%.

In Scotland, meanwhile, new GDP figures show it has only narrowly avoided a double dip recession, with the economy growing by just 0.1% in the first quarter of the year. The data shows the construction sector particularly badly hit – with output falling 3.6% – while the production and service sectors both grew 0.9% and 0.3% respectively.

Outlining the figures, Scottish finance secretary John Swinney went on to call for further action by Westminster to support growth, arguing:

“Scotland’s recovery needs to be strengthened, and the GDP figures underline the urgent need for an economic Plan B, or flexibility, from the UK government.

“Instead of Westminster’s 800 million pounds cut to the Scottish Government’s capital budget this year, a Plan B from the UK Government needs to focus on additional capital investment as a driver of recovery, improved access to finance for good businesses, and employment security – such as the Scottish Government is delivering – to enhance consumer confidence, which is critical to recovery.”

In his assessment of the figures, published yesterday, Douglas Fraser, BBC Scotland’s Business and Economic Editor, commented:

“Today brings grim data on the Scottish economy. Poor weather helps explain why the UK saw contraction in the October to December quarter.

“But it’s less easy to explain why Scotland’s growth in the first quarter of this year – at only 0.1% – was so much weaker than the UK’s 0.5% figure, itself seen as a weak rebound. Only slightly less economic activity, and Scotland would have seen a double dip recession, with two consecutive quarters of contraction.

“Underlying the headline figures, construction contracted most, and at the same rate as the UK as a whole. Manufacturing grew more strongly than the UK, but the transport and communications had markedly lower growth than the rest of the country. Services grew a bit more slowly than the UK, but that sector’s dominance of the economy means it has a big impact on widening the gap.

“The sharp increases in insolvency and bankruptcy figures, also published this morning, add to the grim picture. They suggest pent-up pressure from people who sought to put off admitting financial defeat.

“As with some retail businesses, it seems the recovery is proving so slow and uncertain that people’s finances are running out of the hope of a turnaround. And then there’s the retail data, with no growth in spend despite high inflation.

“It’s no surprise that we’re told by the Scottish Retail Consortium that shoppers aren’t rushing to buy barbecue food, salads, and sandals, but the lack of consumer confidence isn’t all about the weather.”