Tentative signs of recovery are appearing at national and regional levels. Tony McDonough reports
ECONOMIC indicators are showing at last that the recovery is gaining momentum both at a national and a regional level.
Two successive quarters of economic growth, manufacturing output rising at its fastest rate in eight years, a revival in the housing market and encouraging unemployment data means fewer people are now predicting a double-dip recession.
And now that the Conservatives and the Liberal Democrats have got together to form a coalition government, it seems that at last we will have a credible plan in place to cut the UK budget deficit.
However, that plan could cast a shadow over Merseyside in the shape of £6bn of public spending cuts.
The Liverpool city region has a higher proportion of public sector employment than other areas of the UK and so it is feared any cuts could have a disproportionate effect.
Merseyside has traditionally fared worse than the rest of the UK during downturns, but this time around the city region appears to have weathered the storm much better.
Unemployment across the region’s six boroughs is now at its lowest level for 14 months with the number of people claiming jobseeker’s allowance falling 1,577 between March and April.
Both the major car plants – Jaguar Land Rover in Halewood and Vauxhall in Ellesmere Port – are stepping up production as demand starts to return to the automotive sector.
And Merseyside’s housing market is also showing signs of life, according to one leading estate agent.
Peter Stoney, an economist with the Liverpool Macro-economic Group, is upbeat about economic prospects both locally and nationally.
However, he also acknowledges the potential threat to the city region posed by cuts in public spending.
He said: “We are seeing an increase of momentum in the economy, especially in the manufacturing sector.
“Indications from organisations such as the CBI and the Federation of Small Businesses show acceleration of the private sector with the weaker pound helping exports.
“The banking sector is showing signs of a return to health without the rash lending policies that triggered the credit crunch crash. So all in all the fundamentals are looking quite good.
“I think the formation of the coalition Government has been a fair reflection of the voting patterns in the General Election. It showed that people clearly did not want Labour to remain in power.
“The transition so far seems to have been very smooth and that can only be good for the economy, which seems to be pushing on.
“And I thank the Lord that we are not in the eurozone, which at the moment is a disaster.”
