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More trouble on the way

The release of minutes from monetary policy decisions on both sides of the Atlantic have dampened any lingering prospects of economic recovery this year.

In the US, the Fed committee's statement noted that "the outlook for economic activity had weakened further; growth in consumer spending had slowed, and labor markets had softened." While in the UK minutes released on Wednesday painted a similar gloomy picture revealing underlying uncertainty about the immediate future. The report noted how "It was unclear by how much a weakening housing market would contribute to a slowing in the rest of the economy. However the committee did expect that construction companies' "output and employment would be adversely affected."

This prediction has proved all to accurate with major job cuts announced by all the major construction companies this week as well as some of the companies supplying them. Redrow are planning to axe 15% of their staff, Taylor Wimpey, owners of Bryant Homes are closing 13 regional offices. Countryside Properties and Crest Nicholson are also planning reductions in staff. The slowdown in the housing market has also led Wolseley, a plumbing and buildings company, to add further redundancies to the 400 jobs already axed since last year.

Rising inflation is now inevitable and this will hit cash-strapped consumers hard this year. It is likely that the retail sector will be the next to feel the big squeeze.

Economic meltdown

It's been the hottest week of the year so far, but the gloomy economic news continues as all the government and the Bank of England's efforts to revive the economy prove futile.

The dramatic U-turn on the 10p tax ahead of the Crewe and Nantwich by-election has failed to heal the damage caused by its introduction in the first place. The Prime Minister would have been far from happy to hear that CPI has now risen 1% higher than the target rate.

Rising inflation caused by high food and energy prices is threatening a return to double digit inflation. This will hit cash-strapped consumers hard as they already come to terms with the fall out from the credit crunch.

As energy bills rise, budgets for non-essential items are being cut and this is starting to impact on the jobs market. An increase in manufacturing costs was blamed for Indesit's plan to axe 420 jobs at its Cambridgeshire factory while major electrical retailers, Currys are planning to close 77 of their stores.

Banks are continuing to shed staff at an alarming rate in line with forecasts of up to 20,000 job losses this year. Lloyd's TSB are cutting 450 IT jobs and exporting them to India and the wait is over for Morgan Stanley staff fearing the axe, cuts their have started this week. The number could reach at least 350 this year.

Bricking it

Bricks may have saved the three little pigs from having their house blown down, but time has run out for workers at a North Wales Brick factory. The plant has been stockpiling bricks following a downturn in demand said to be at its lowest level for 25 years.

A cull has always been on the cards since the takeover of the troubled Hanson group last year when it was announced that there were “no plans for extensive job losses”. The closure of their Caernarfon plant will result in the loss of 50 jobs which is likely to have a significant impact on employment in this area of Wales.

According to union leaders, there was little choice other than to close with stocks of bricks piling up due a fall in demand from the building trade. The factory is the latest in a string of closures since the company was sold to Heidelberg, the German concrete and cement giant. 

Should this latest closure should set alarm bells ringing in the construction trade? particularly now that we are entering spring, traditionally the start of the industry’s busy spell. Either way this is another sign of a traditional industry in decline.

Join the discussion and tell us what you think?

Tata to Jaguar - How safe is the UK car industry?

Tata the Indian car giant has reportedly paid $2.65bn for Jaguar. Given the fate of Rover is this good news for jobs in the UK car industry or another false dawn?

The global car industry has become increasingly competitive in the face of stiff competition from Asia. Genuine British cars have been a significant casualty since the eighties with successive names bought out by larger, more competitive multinational car manufacturers. This has occurred to such an extent that British marques are now
 long dead apart from a few specialist sportscar manufacturers tucked away in places like Blackpool.

What remains are labels like Jaguar, Rolls Royce, Bentley, yet with successive takeovers you have to wonder how safe even these are in the current climate of global recession. Rover provides a telling example of what can happen when the giant car companies get it wrong. Rover changed hands between Honda, BMW, Ford, all of which failed to make the brand competitive on the global market. The company has now ceased to exist apart from a pale imitation brand called Roewe in China.

Will Jaguar suffer the same fate? And more importantly for the industry as a whole do we have a sufficient skills base to compete with manufacturers in Asia and emerging Eastern Europe?

Join the discussion and tell us what you think?

More bad jobs news for London’s banking sector

Unease in the banking sector is growing with salaries being cut and decreasing job vacancies. Current sentiment is pessimistic about the future and in all likelihood the predicted loss of 10,000 jobs in London's finance sector is just the start of further job losses through 2008. Wall Street has already axed a breathtaking 30,000 jobs in the last seven months.

The reaction among those in the city is to try and ride out the current storm and hang on to their existing jobs rather than seek employment elsewhere. The number of new vacancies has dropped by 9.6% in February while average salaries in financial services fell by 2%. With high borrowing costs and a more risk averse culture developing as a result of the sub-prime crisis in the US, the once lucrative trade in sub-prime loans has all but come to an end.

With a steep decline in mortgage lending and a struggling UK housing market, there is every possibility that thye good times have well and truly come to an end for London's banking sector for some time to come

Join the discussion and tell us what you think?

Burying Heads In The Sand

Here in the UK there appears to be a major shift in mentality as the country looks set to slide into a major slowdown. Far from accepting the reality of the situation, all sense of reality seems to have gone out of the window with both Alastair Darling and The Bank of England downplaying the effects of the banking crisis on the economy.

As we have discovered on P45now job losses both here in the UK are threatening to reach epidemic proportions with banks, shops and the civil service all facing major cutbacks. Surely this institution is aware of a crisis looming?

The latest news coming out of the North East, however, leads one to conclude that current policy among those with vested interests is to bury their head in the sand while all around people are losing theirs!

We hear today that the North East Regional Development Agency is “upbeat over jobs”. This is despite 2,000 jobs going at Northern Rock contributing to a 7% cut in the region’s banking and insurance sector jobs and a strike over job cuts in the regions job centres. We then hear that there are 1,100 vacancies in the financial sector which should cater for about half the people who will be out of work this year.

Rather than being kept in the dark by agencies more concerned with damaging reputations it’s high time they come clean about what’s really happening….