Weekly News 18th - 23rd July 2011
Local Economy
Newcastle Airport’s pre-tax losses rose to £4.8m in 2010 from £4.1m in 2009; passenger numbers dropped to 4.4m in 2010 from 4.6m. Its operating profit was £16.1m compared to £17.1m in 2009. The airport agreed a £377m mortgage in 2006 and still owes £304.5m. A further refinancing is due in 2013. The airport is 51% owned by the region’s seven councils. Copenhagen Airports owns the remaining 49%. (J 20/07)
Newcastle-based Technology Services Group has taken over Rocket Solutions. TSG, which has around 500 staff and a £45m turnover, provides IT services to small and medium-sized businesses across the UK. Rocket is a consultancy for Microsoft SharePoint and provides solutions to complex business problems; clients include Drax Power, Your Homes Newcastle and Leeds Bradford Airport. (J 20/07)
NE Economy
Insolvency rates among North East businesses rose over 20% in the last year – PricewaterhouseCoopers. However, corporate insolvencies fell from 4,216 in the first quarter to 3,531 in the second quarter. Despite the 16% fall, the number is still 2% higher than the same period last year. (J 21/07)
IPPR North has created the Northern Economic Futures Commission, a private sector-led body that will seek ways to boost northern growth. Think tank IPPR North said the north was falling behind in factors that drove economic growth such as skills, business start-ups and investment in transport, science and technology. (FT 21/07)
Job Gains
Sunderland-based Nissan will recruit 200 engineers and maintenance technicians to oversee a new battery plant and the development of the Nissan LEAF and Qashqai. (J 22/07)
Subsea consultancy specialist Flexlife is opening a base on Gateshead Quayside and plans to create 50 jobs over the next 18 months. The Scottish company also has offices in Brazil and operates in Africa, the Far East and the Mediterranean. (J 21/07)
Gateshead-based Jonsigns aims to double turnover to £4m over the next two-years as well as double its 26-strong workforce. The signage company has had recent orders from discount store chain 99p Stores, which plans to open 20 stores in the North East over the next three years, and Grainger Games, which hopes to grow its 64-strong chain of shops to over 100 by 2013. (J 21/07)
Job Gains North East
Durham-based Business and Enterprise Group, in partnership with London-based call centre operator Careline Services have been appointed by the Department of Business, Innovation and Skills to front its new Business Link helpline. The helpline will replace the Business Link Regional Advisory Service, which closes in November. The contract is expected to provide at least 20 jobs at the Business and Enterprise Group, which currently employs around 340 staff between its offices in Newcastle, Coventry, London, Preston and its Seaham headquarters. (J 18/07)
Northumberland-based Potts Print (UK) Ltd will recruit 15 business development and sales staff this year. The Cramlington printing, packaging and direct mail business has 165 staff and recently acquired a third £1.2m printing press. (J 18/07)
Job Losses North East
More than 800 North East police officers will lose their jobs as a result of Government cuts. In Northumbria, the number of officers will fall from 4,187 (March 2010) to 3,560 in March 2015 to cope with its £64m budget cut. Civilian staff numbers will fall from 2,096 to 1,167 and community support officers will drop from 438 to 248. (J 22/07)
National Economy
The recession widened the north-south divide and affected low-skilled workers hardest – Office for National Statistics. (FT 21/07)
UK car production in June was 120,036 vehicles – Society of Motor Manufacturers and Traders. Production for the year to June was 662,852, up 4.1% on the same period last year. (J 22/07)
Late News: Gross domestic product (GDP) rose [just] 0.2% in the second quarter of 2011 [down from 0.5% in Q1]. Output in production industries fell by 1.4% while output in both the construction sector and in the service industries rose by 0.5%. GDP rose 0.7% in 2011 Q2 compared with 2010 Q2. (Office for National Statistics, GDP Preliminary Estimate, 26/07)
International Economy
Despite passing the European Banking Authority’s stress tests, shares in Barclays, HSBC, Lloyds Banking and Royal Bank of Scotland all fell. Analysts noted that the tests assumed a 25% write-down on 10-year Greek government bonds, market prices currently stand at a 50% mark-down. (J 19/07)
Debt worries in the US and Europe pushed the price of gold to a record price of $1,610 an ounce. (J 20/07)
Interest rates on eurozone bailouts to Greece, Ireland and Portugal will be cut following an emergency summit of eurozone leaders. In addition, the maturity of the loans will double from seven and a half to 15 years. (J 22/07)
Spain has had to pay higher interest rates to borrow £3.9bn. The yield on loans repayable in 12 months was 3.702%, up from 2.695% paid in June. For 18-month bonds, the yield was 3.912%, up from 3.26%. (J 20/07)
Development
Developer Verum Victum has submitted plans for a £10m mixed-use scheme on the site of a former car showroom at North Hylton road, Sunderland. The 50,000 sq ft proposal includes an application for an 18,000 sq ft supermarket, 12 retail and two office units. Sunderland City Council planners have recommended the proposals be approved, although the decision has been deferred until later this year. (J 20/07)