The South East section includes key facts, Top 25 companies ranked by turnover, transport statistics, political tables and regional contacts.
This is an extract from the South East section of UK plc
Key drivers remain
It is an old business expression that when the US catches a cold the UK gets the flu. Just how bad that US cold is from the problems in the American sub-prime mortgage market will not be fully felt until 2008. This means here in the UK we may not know whether we have caught the flu or it’s just a runny nose.
But in broad terms the South East economy remains resilient and buoyant supported by London’s position as the financial capital of Europe and according to some, the world.
There is no doubt part of the City, particularly in Canary Wharf, will catch a full dose of the flu, and there may be a short term impact in some sectors such as bond traders, but one dealer’s misery is another’s fortune.
The government’s stated aim of building 3 million new homes by 2020 will remain a big driver for the South East economy in both the short and long term. While environmentalists may continue to debate how much of this land will be on what is now called green belt, there is no doubt a significant number of these homes will be in the region.
This expansion will create considerable business opportunities, which are real and sustainable at many levels. The major house-builders such as Persimmon are predicting 3 to 4 per cent growth in the price for new build properties – figures that are likely to be close to double the overall economic growth for the UK.
So, despite short-term nervousness about pockets of the economy, the key drivers for economic growth in the region remain.
There is a steady migration into the South East from Eastern Europe, which will continue, as more countries such as Romania become full members of the European Union. But this is also likely to be supplemented by the movement of labour around the UK as a result of expansion in further education. The current generation of graduates are the first to be saddled with a full three years of debt, estimated to be on average £30,000 each, and many believe there is a better chance of finding a job to pay off this debt in and around the capital.
Once the Beijing Olympics is over at the end of the summer of 2008 the real countdown to the next major economic driver – the games of London 2012 – will begin in earnest. But tourism in the region has already steadily increased, in part attributed to the Olympic factor, and the International Olympic Committee has a series of statistics that show the benefit to the host city starts many years before the event.
The East End of London, which will be the home for much of the Olympic activities, is just the latest in a rolling regeneration programme being undertaken in the region using public and private money, and increasingly attracting investment from the investment funds of other major governments.
Infrastructure is an attractive asset class and the appetite for investment in this sector remains healthy, despite the odd hiccup like the collapse of Metronet, the company refurbishing the London Underground.
As the region ends a challenging year, there are reasons to be cheerful but the easy money is going to be harder to find. Patience and a long-term perspective will be the watch words going into 2008.
Lawrence Gosling is a South East-based freelance
journalist and former editor of IT magazine