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Weekly News: 20 - 25 June 2011

Local Economy

New Tyne West Development Company (NTWDC), the public private partnership which will build 1,800 homes in Newcastle, received £250,000 from the Homes and Communities Agency (HCA) through the Government’s FirstBuy scheme.  The HCA has granted Firstbuy funding for 20 homes to be built in the West End of Newcastle in [spring] 2012.  Under Firstbuy eligible first time buyers can receive an equity loan of up to 20% of the value of the property, jointly funded by the HCA and NTWDC.  (J 22/06)

Metnor, the property construction and contracting firm based in Killingworth, North Tyneside, has returned to growth.  Revenues in 2010 were £51m, up from £34m in 2009; pre-tax profits were £1.6m compared to a loss of £800,000.  (J 22/06)

Revenues at JT Dove were up 27% in the first quarter of 2011.  The Newcastle-based builders’ merchant made a loss in the last two years.  However, revenues were steady in 2010 at £24.6m with losses narrowing from £690,000 to £100,000.  (J 22/06)

NE Economy

 Last year 2,645 possession orders were served in the North East.  Research by homelessness charity Shelter found that unemployment had risen at more than double the rate in identified “repossession hotspots” when compared to areas least at risk.  North Tyneside, South Tyneside, Gateshead, County Durham and Sunderland were all identified as hotspots.  (J 21/06)

 

The collapse of the Focus DIY chain has hit several North East businesses including:

Business

Owed
Husqvarna, Newton Aycliffe £1.9m
Wilsonart, Shildon £550,000
Egger Retail Products, Hexham £88,951
Storeys:SSP, Newcastle £44,000
Radford Shelving, Newcastle £33,233
Knight Frank, Newcastle £30,000

The sale of Focus assets is expected to generate more than £43m.  (J 23/06)

The Government intends to reprivatise the East Coast Main Line in 2012.  The service has been in the hands of the Department of Transport since 2009 when it took over the franchise from National Express.  (J 21/06)

India-based Tata Steel has been paid £80m by the consortium of buyers whose withdrawal from a supply deal led to the closure of a Teesside steel plant.  The plant reopened after it was bought by Thailand’s Sahaviriya Steel Industries in February.  (J 24/06)

Middlesbrough-based pawnbroker Ramsdens plans to open 115 stores in the next five years.  Turnover at Ramsdens rose from £13m in 2008 to £34 in 2010.  (J 24/06)

North East exports for the year to the end of March were £12.78bn, nearly 30% up on a year earlier - HMRC.  (J 22/06)

Job Gains

The Cairn Group has taken over a hotel development at Newcastle Airport in a deal worth £25m.  The 175-bedroom hotel and restaurant will be completed within months and will create 125 jobs.  (J 21/06)

Advantex Network Solutions Ltd, based in Houghton-le-Spring, Sunderland, is looking to create around 15 jobs.  The IT installation specialist has picked up £1m of work over recent months, including work at Nissan’s new Sunderland battery plant.  (J 22/06)

Job Gains North East

Subway, the US-based sandwich giant, plans to create 700 jobs over the next five-years with a £6m investment in the North East.  The company employs nearly 1,000 staff at 80 stores in the region.  It plans to open 70 more stores by 2015.  (J 22/06)

Neuro Partners, which provides ‘at home care’, aims to increase its North East workforce by 100 over the next two years.  The Gateshead-based firm employs 100 out-of-office carers and 30 staff at its new HQ on Team Valley.  (J 20/06)

National Economy

Public sector net borrowing fell in May – Office for National Statistics.  The public sector budget deficit was £15.3bn in May, after taking into account the intervention in the financial sector.  Net borrowing, also excluding the intervention, was £17.4bn.  (FT 22/06)

Minutes from the June Monetary Policy Committee meeting show the balance of concern has shifted from high commodities prices and inflation to weak underlying demand, especially from consumers.  (FT 23/06)

The International Energy Agency cut the price of oil by almost $10, to $106 per barrel, by releasing oil from strategic reserves.  (FT 24/06)

Over the next six months, 29% of employers plan to take on more staff while 18% expect to reduce permanent recruitment – CBI and Harvey Nash Survey of 335 employers with a combined workforce of nearly 3.5m.  (FT 21/06)

There were 6.3 Jobseeker's Allowance claimants for every job centre vacancy in May, up from 5.2 claimants in May 2010.  In some of the worst-hit parliamentary constituencies there were as many as 84 JSA claimants per vacancy.  About two-thirds of unemployed people claim JSA, and only a third of vacancies are advertised in job centres.  (FT 23/06)

Retail sales weakened in June as consumers reduced spending on groceries and clothes – CBI.  (FT 24/06)

Development

Demolition of the former Atmel plant on North Tyneside’s Cobalt Park has started.  Developer Highbridge Properties secured £263m of funding for the second of three new data centres to be built on the Park.  (J 22/06)

Eurozone Economy

Greece came to the edge of defaulting on its €300bn+ sovereign debt, which would have caused Greek banks to become insolvent and losses for other banks across Europe.  Instead the Greek parliament passed a vote of confidence in the Greek government.
Late News: on 29th June, the Greek parliament approved a €28bn package of cuts and tax rises.  This means EU/IMF loans for July will be released, and a further package of €110bn in loans will follow.  Every 3 months, however, it will have to pass tests for the release of the money.  It is not clear that Greece will meet the criteria up to mid-2013.  After that date it could restructure its debts using the European Stability Mechanism.

Spain approved a 3.8% cut in the state budget for 2012 and set a spending limit of €117.4bn.  Spain has trimmed its deficit from 11.2% of GDP in 2009 to 9.2% last year.  However, it has a gross external debt of €1,744bn.  The Spanish economy is expected to grow by 2.3% next year. (FT 25-26/06)