Honda’s four-month factory shutdown earlier this year briefly made Swindon an emblem of the downturn. But, as Chloe Rigby finds out, with plenty of the town's business proving resilient or thriving, Swindon has turned a corner.
Swindon has long had a reputation as a good place to do business. It’s well placed for road and rail links to the South East and the South West, and its reputation as an unattractive town – bolstered in 2008 when GQ editor Dylan Jones asked if Swindon was the UK’s ugliest city – has helped to keep house and office prices relatively affordable. Fast growth has also been boosted by strong inward investment.
Today Swindon is home to a strong line-up of blue-chip businesses, particularly in the financial, automotive and high-tech sectors. Zurich, Nationwide, BMW, Honda and Intel all have major operations in the town, which is also a centre for research bodies and organisations, from Research Councils UK and the Technology Strategy Board to the National Trust.
For years it’s been one of the fastest-growing towns in the UK, vying – as yet unsuccessfully – for city status. But in the past year Swindon has been hit by recession.
So is it still a good place for business to be?
The bad news...
Swindon has at times seemed to be almost synonymous in the national psyche with economic gloom. Local car manufacturer Honda’s decision to shut down production lines for four months until June 2009 came to represent the downturn for a time. During the shutdown, 1,300 employees took voluntary redundancy, and when the plant reopened the returning staff took a pay cut of between 3 per cent and 5 per cent. Local suppliers were hard hit, as well as those across the supply chain in the West Country and the West Midlands.
The financial services sector was also knocked pretty hard, with thousands of jobs expected to have been lost by the end of the year. Unemployment has risen faster and more steeply in Swindon than in many parts of the country.
Woolworths, Tyco Electronics and Motorola are among the biggest companies to have cut jobs, and after years of practically full employment the number of people claiming Jobseekers’ Allowance peaked in June at 5.5 per cent.
Youth unemployment is also high. “We have had a challenging year – no two ways about it,” says councillor Phil Young, lead member for economic development and regeneration at Swindon Borough Council. But for the past three months claimant numbers have fallen,” he says. “In September, the total stood at 5.1 per cent - or 6,143 people.”
James Durie, director of the regional strategy-focused Initiative at business organisation GWE Business West, adds: “Swindon has dipped more than others, but the town had further to fall.
It was virtually at full employment before and it has been hit from various angles.”
In the meantime, the jobs gloom has been compounded by delays to significant parts of the town’s regeneration plans, following the property market’s well-documented problems.
The city’s long-lamented retail offer was going to be improved with a new Regent Place shopping centre, but that has been delayed indefinitely because of the failure of development company Modus Ventures.
The good news...
But Swindon still has successes to celebrate. Royal Mail, nPower Renewables and Canadian newcomer Cleeve Technologies are all consolidating in the town – citing, respectively, “excellent logistical connections” and affordable housing, communication links, and the availability of hi-tech workers.”
The world-famous Bodleian Library is also bringing storage facilities to Swindon. “The prestige of something like this for Swindon is enormous,” says Chris Hitchings, director of development at the New Swindon Company, because of what it says about the borough’s can-do approach to business. Nigel White, HSBC’s area commercial director for Wiltshire, says: “Numerous players are coming to Swindon and I can understand why. If you’re looking for employees, you can attract them from a huge part of the country and offer them a high quality of life.”
There are also clear signs of recovery in the financial and auto industries. Building society Nationwide’s assets grew by 13 per cent in 2008/09 to more than £202bn as a result of the company taking over smaller, failing societies. HSBC’s White says: “The positive part of our business is that we’re starting to see applications for funding expand again. My feeling about Swindon is that it’s looking forward to moving onwards and upwards.”
And in the car industry, Honda is back at work in Swindon. It started making the new Honda Jazz Supermini in September.
New beginnings?
The number of new start-ups remains steady, according to local Business Link adviser Andy Mercer, which is good news for companies such as protective packaging company GWP Group, a South West Beacon company.
Group chairman David Pedley says: “We’ve only really maintained our volume by winning new business. Swindon is still a good place to do this because there’s a thriving hub of innovative small developing companies.”
These are in sectors including telecoms, electronics as well as automotive supply. Malcolm Gregory, head of the employment team at Withy King Solicitors, says many HR managers who have been made redundant have set up their own consultancies: “The overall feeling among businesses seems to be one of cautious optimism.”
Mercer also detects a return of consumer confidence and spending. Demand for temporary staff is up, and there are bargains to be had on prime commercial property. “The economy appears to be on a firmer footing. With the right support, I have every confidence that Swindon’s businesses will come through the recession even stronger, and find new ways to grow,” he says.
GWP’s Pedley is more cautious: “I think we are seeing a slight upturn as a consequence of people restocking. But I don’t think consumption is going to match output. I think it’s going to be a W-shaped recession. The next dip probably won’t be as dramatic but there will be one.
But, equally, good quality businesses will win new business.”
A full version of this article appeared in the November 2009 edition of South West Business Insider. To subscribe visit our online Shop .
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