In Focus: The grim tales
I’ve been doing a bit of a straw poll of local business types over the last week or so, to try and understand what they think will happen to the East Midlands economy over the next 12 months. Revealingly, they make pretty grim reading, and those who thought we might be out of the woods are very much in the minority.
From corporate hospitality to commercial property, it seems as though caution is king. Jon Emmerson of agent Heb - not normally know for wearing a frown - told me that he fears that unemployment is going to be key.
“The private sector will be very slow to take up any slack for various reasons, including the fact that the banks are still willing to lend to private businesses and also the fact that some companies - not Heb by the way - view public sector workers as being not ‘sharp’ enough for the private sector,” he said.
Unemployment, of course, means a number of things – a slowdown in all sales areas, social disharmony and antagonism towards the government. None of these are conducive for a strategy towards growth in our economy, as Jon points out.
Elsewhere, but on a similar theme, Pam Pindar, managing director of Nottingham-based outsourcing provider PBS (UK) told me that, according to Tribunal Service figures, the number of tribunal claims has increased by 56 per cent to the highest number on record this year.
Pam said: “Much of this can be attributed to the troubled economic times we have experienced, as the number of claims involving redundancy pay for example, shot up by 76 per cent in this period, so it is of paramount importance that businesses tighten their HR procedures in 2011 if they have not already done so.” I guess she would say that, but it’s certainly sobering thought.
In property, Emmerson thinks that rents will remain subdued and large incentives will have to be continued to be provided by landlords.
Secondary properties across all sectors will continue to struggle in terms of lettings and sales, he says. However, there’s a glimmer of light in the doom as he says that prime investment properties will continue to do well and will attract the reasonably large amounts of equity that is out there in the market.
However, as we can see from today’s news from the Derbyshire and Nottinghamshire Chamber of Commerce, there does remain some confidence in the market. Perhaps it’s sensible at this point to remain as sober as possible about the outlook – overtrading during a recession can be as bad as anything, after all.
Here’s hoping the next 12 months are better than the last 24 – whatever happens. Have a great Christmas and a Happy New Year.
Sam Metcalf, Insider
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