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Weekly News: 27 June - 2 July 2011

Local Economy

Newcastle-based Five-Quarter is aiming to raise £30m to use underground coal gasification to tap into reserves off the North East coastline. It aims to start production within two years and reach full production within a decade. Five-Quarter secured approval from the UK Coal Authority to recover reserves from a 400sq km area, stretching from Alnmouth in Northumberland to the Tyne. (J 02/07)

North Tyneside-based Shasun Pharma Solutions saw revenues rise by 17% to £37.2m in the year to March. The North East arm of the Indian pharmaceutical firm made a pre-tax profit of £1.9m. (J 30/06)

In Gateshead, Hall Construction Services has submitted a plan to extract 230,000 tonnes of coal from a site near Marley Hill. The three-year scheme includes full restoration of the opencast extraction site. (J 29/06)

NE Economy

Northumbrian Water confirmed it is the subject of takeover talks. Cheung Kong Infrastructure Holdings is considering a cash offer for the Durham-based utility company. It is estimated CKI would have to pay in excess of £2bn. Northumbrian Water provides water services to 2.6m in the North East and has 1,648 employees. (J 28/06, 02/07)

Paul Woolston, senior partner at accountants PwC in Newcastle, is the new chairman of the North East Local Enterprise Partnership. The board consists of nine business leaders, seven council leaders and two education chiefs. They will decide the location of an Enterprise Zone, before considering the wider economic problems facing the region. (J 02/06)

The average price of a house in the North East fell by 1.8% in May, the annual fall was 6.9% - Land Registry. For England and Wales the monthly fall was 0.4%; the annual fall was 2.2%. (www.landreg.gov.uk, 28/06)

South Tyneside Homes and Homes for Northumberland have joined forces with the National Renewable Energy Centre (Narec) in Blyth, Northumberland, for a £1.9m scheme to upgrade the thermal efficiency of 322 homes. In South Tyneside, £1.35m of the money will be used to clad and insulate tower blocks in Jarrow and Tarran Newland homes in Marsden. (J 28/06)

Job Gains

Newcastle Home Care Associates, a division of Care and Share Associates, aims to recruit around 10 support workers a month on an on-going basis. It provides support services to people in their own homes across the city and has recently secured additional contracts. (J 28/06)

South Tyneside-based Immunodiagnostic Systems Holdings plans to increase its North East workforce by around 50 by 2014. Revenues from the company’s automated testing systems nearly quadrupled year-on-year to £10.4m, with 241 machines installed in the year to March 2011. (J 28/06)

Job Gains North East

Norwegian-based TryggPharma has paid £14m for the former Lunbeck Pharmaceuticals facility at Seal Sands, Teesside. TryggPharma will initially employ 25 staff at the site over the next twelve months as it scales up production. In the longer term the site could employ 100 staff. The pharmaceutical facility closed in 2008 with the loss of 65 jobs. (J 29/06)

Job Losses North East

Retail jobs at risk:

  • Women’s fashion firm Jane Norman has gone into administration. The company has stores in the Metrocentre, Gateshead, and Eldon Square, Newcastle. It also has Debenhams concessions in Sunderland, Middlesbrough and Stockton. Nationally administrators confirmed the closure of 33 out of 94 stores with the loss of 400 jobs.
  • TJ Hughes, the department store chain, has moved to appoint administrators putting 4,000 jobs at risk.
  • Thorntons signalled it will cut at least 120 outlets over the next three years as leases expire. It will also consider the future of an additional 60 shops. These moves put up to 1,125 jobs at risk. It plans to sell more chocolates on-line and through supermarkets. (J 28/06, 29/06)

National Economy

Gross domestic product grew by 0.5% in the first quarter, unrevised from growth previously published - Office for National Statistics. (www.statistics.gov.uk, 28/06)

The manufacturing sector grew at its slowest pace for nearly two years in June – Markit/CIPS Purchasing Managers’ Index. The Index, where a reading of more than 50 indicates growth in manufacturing activity, slowed to 51.3 from 52 in May. Weak domestic demand and slower growth in exports contributed to the lowest reading since September 2009. (J 02/07)

Household disposable income fell by 0.8% in real terms over the quarter to March, following a fall of 0.9% in the previous quarter and is down 2.7% over the year – Office for National Statistics. The household savings ratio, the money left after consumption, fell from 5.1% to 4.6% over the quarter to March. Adjusting for inflation, real expenditure fell by 0.6% in the quarter. (J 29/06)

The number of mortgages approved for house purchase increased by 1% in May to 45,940 – Bank of England. Bank holidays were blamed for the slump in activity in April. May’s approval figure was lower than in March. (J 30/06)

Lloyds Banking Group said it will lose 15,000 staff by 2014. HSBC will cut 700. (J 01/07)

The UK population was 62.3m in mid-2010, up by 470,000 (+0.8%), the highest annual growth rate since 1962 - Office for National Statistics. (FT, J 01/07)

Development

North East property, leisure and health care company DAV Developments is preparing to invest £15m in a redevelopment of the Spanish City site in Whitley Bay, North Tyneside. (J 29/06)

Eurozone Economy

UK banks are estimated to have £2.1bn invested in Greek government bonds and other forms of debt – Bank for International Settlements. As of May, the part-nationalised Royal Bank of Scotland held more than £1bn worth of Greek bonds – UBS. (FT 02-03/07)

Although the Greek parliament approved the government’s austerity plans, the EU and IMF have to agree every three months to release further Greek bailout money. (FT 02-03/06)