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Postiwyd Gan CBSA on Tuesday, July 03, 2012
The Welsh economy shows no sign of improvement with any hope of recovery a long way away. This is not just a glib statement designed to depress us further but a judgement based on the key indicators.
The figures remain steadily and uncomfortably high. 132,000 people are out of work according to the Governments figures in April which is 17,000 up on the previous year. This means that 9% of our population is looking for work and that makes us one of the highest unemployment regions in the UK.
Recently a report from the Institute of Public Policy Research predicted that by the end of this year almost a million people will have been out of work for a year. The main groups making up the long term unemployed are the under 25s and the over 50s. Sadly young people account for over 25% of the long term figure.
The Institutes chief economist said; ‘’Long term unemployment is the hidden crisis of the slowest ever economic recovery in the UK. The Youth Contract is designed to help young people out of work for more than a year as part of the Governments Work Programme. It has only been able to secure employment for a third of jobseekers on the programme.’’
Tony Dolphin the Institute’s chief economist believes that Government policy is not keeping up with joblessness.
There is an increasing number of people, myself amongst them, that are now questioning if the Work Programme is really working, or is it time to change it?
More than a third of all 16 and 17 year olds in Wales are out of work and over 22% of 18 to 24 year olds are in the same boat. The huge tender awarded to big English organisations like A4E by Westminster to run their flagship Work Programme is failing in Wales. Initiatives designed in Wales and supported by the Welsh Government are doing much more to tackle this issue than anything coming out of London.
The latest report from Ernst & Young called ‘’Staying ahead of the game’’ paints a rosy picture in that the UK has maintained its pole position as Europe’s leading destination for foreign direct investment. However there has been a 7% reduction in values while the overall figure for Europe increased by 4%.
The interesting thing here is that London came top of the list (no surprise there) but sadly Wales came bottom.
Wales secured 9 inward investment projects which accounted for 1.3% of the total coming in last behind N.Ireland who achieved almost twice as much as Wales.
Our most successful year was 2003 when over 9% was secured in Wales, but since the demise of The Welsh Development Agency there has been a year on year drop in Welsh performance. This does not bode well in today’s competitive market.
At the same time the Lloyds TSB Wales business activity index has shown that the manufacturing and service industries in Wales fell and the reason given is that there has been a reduction in businesses winning new work.
There is disturbing evidence that Welsh companies’ order books are looking thinner and that work-in-hand volumes have dropped and this has had a marked impact on employment within the service sector. At the same time the Office of National Statistics figures for May show that manufacturers are paying more for their materials and this is the 37th consecutive month that these costs have increased.
Values and transactions in both residential and commercial property are a valuable indicator of the state of the economy and of confidence levels. While the property market in London and the South continues its gradual recovery the situation in Wales remains negative. Mortgage numbers are down and values are not moving.
In terms of commercial property transactions a recent report from The British Property Federation has stated that average lease lengths have fallen significantly. This continues the trend towards shorter leases and is a sign of continued low confidence.