Manchester's Economy (updates)

[heatonparkincakes]

And as for fracking.

Bar the excitable VD boy imagining Preston as the new Dubai, fracking means:

The North West gets all the pollution and the City of London gets all the profits, hookers and cocaine.

By the way I would like to see the details of the devolved powers before commenting.

[LNGCats]

Yesterday and today they reported from the Mary Portous knicker factory in Middleton.
Yesterday highlighting the varied needs for manufacturers in the area, having a report from Siemens in south Manchester and an online fashion company in the city centre, positive in the sense that a rounded economy could be created in the area, from manufacturing to sale.
Both low tech underwear and high tech goods.
The knocker factory owner discussed the fact he wanted to employ more people in the area, of high unemployment, but the government was not helping.
The Siemens manager said lack of investment in roads, rail and ports was hampering their ability to export more.

Today they had some bit very well puffy people from Middleton, most of whom work long hours for not much pay, relying on benefits to have anything like a reasonable standard of living highlighted really well that far from everyone on benefits is a lazy scrounger in fact, those on the Priam were hard working, very poor people who would be badly affected by the changes announced today.

The UK and Ireland Siemens CEO was on, comparing how the Germans do it. Highlighting twenty years ago they setup the state funded investment bank to focus investment into areas they wanted to excel at on a global level, its clearly worked. He stated that simply fit ideological reasons our government won't do it as they are too wedded to the free market.

Again he highlighted lack of infrastructure investment that holds his company back.

The knicker factory owner stated red tape currently means it costs two thousand pounds to take on a new member of staff, he wanted that reducing so he could help reduce the unemployment in a poor area such as Middleton.

In the London studio Faisal Islam showed a shocking graph showing that the to 10% are taking the biggest hit from today's changes, after that the poorest 10%, then each of the poorest parts take slightly less add they get richer.

Of you exclude the pension change and the Swiss bank tax money effectively it's almost all money from the poorest in society.

Plenty more in the show, be really good at showing a non London view of the economy.

[heatonparkincakes]

Excellent LNG and thank you.

In the run up to the 1997 general election I recall the then Labour leadership pointing to Germany and manufacturing as a substainable way forward.

Ten years later and I recall Richard Leese arguing to Tony Wilson at the MIF that Manchester benefited in being in the economic wake of the City of London's largesse at te time.

I have some ancient (well ok from the seventies) economic books handed down to me as a kid at uni twenty years later that I recall called for the exact same things as all the commentators call for on Faisal Islam's report.

The blinding distractions of the City of London's glamorously easily acquired wealth convincingly bewitched the political elite with the inevitable consequences.

Need I say it again.

Private wealth, public squalor.

[LNGCats]

As someone who works in the financial sector, in Manchester, for a London based company and do alright I'd suggest it's far from black and white.

Also forget, the Siemens guy was very positive about the large increase in scientific investment in the autumn statement.

[neil]

Debenhams pledge embraced by textile champions
7th December 2012

Share:By James Graham - Deputy Editor, North West
Lord Alliance is keen to revive Manchester's textiles industry
A COMMITMENT by Debenhams to British-made clothing has been welcomed by former N Bown chief Lord David Alliance, who wants to bring large scale textiles manufacturing back to Manchester.

The department store has put out a call for manufacturers to supply its new 'Made by Great Britons' label.

It’s the latest major retailer to seek British producers as high street names attempt to associate themselves with the country’s textile industry.

Lord Alliance is spearheading a project with former Rochdale MP Lorna Fitzsimons and the Association of Greater Manchester Authorities (AGMA) to help local textile firms capitalise on the opportunities presented by this trend.

He said: "A year ago, I made a speech in the House of Lords stating the case for re-shoring textile manufacturing in this country. By Debenhams calling on British manufacturers to get in touch, they are further emphasising the need for the work we have started in Greater Manchester - jointly between industry and government."

AGMA chair Lord Peter Smith said: "Our project team is going out to speak to textile manufacturers in Greater Manchester to find out if they have the capacity to take on more orders.

“We know that skills shortages and access to finance are key challenges but we want to talk direct to local businesses to develop solutions to these issues. We want to make sure that Greater Manchester businesses are first in line to benefit from the new push to buy British.”

[VDB]

Some good news, don't tell LNG though

North west exports up 14 per cent

Exports from the north west bounced back in the third quarter, rising 14.2 per cent or £786m against the previous three months, when they sank to a three-year low.

Figures released by HM Revenue & Customs show that £6.32bn worth of goods were sent overseas from the region in the three months to September.

It means firms have clawed back some of the ground lost earlier in the year. In the second quarter, exports from the north west slumped by 19.4 per cent compared with January-March, from £6.86bn to £5.53bn.

Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, said a surge in demand for chemicals was the main reason for the improved performance, but that overseas trade in general remains subdued, largely because of the eurozone economic crisis.

He added: “It is pleasing to see that, although exports have not fully recovered all the ground lost, every export destination by global region has registered an increase in volume over the quarter, despite the weakness of the eurozone. There were sizeable increases in exports to north America and eastern Europe, though challenges lie ahead with the US 'fiscal cliff', and risks to exports remain.”

Dr Sloan welcomed George Osborne's announcements in the Autumn Statement that he is introducing a £1.5bn fund to support firms looking to export and reversing much of the 25 per cent cut to UK Trade & Investment's budget.

[heatonparkincakes]

Good find VD.

Has anyone got any reasonable recent evidence to support my gut assumption that GM is driven by exports in terms of goods made, sold, labour and skills including contracting out to the south and Europe?

[Cherguevara]

I'd classify that as not as bad as it was news, rather than good.

[WatcherZero]

Originally Posted by heatonparkincakes

Good find VD.

Has anyone got any reasonable recent evidence to support my gut assumption that GM is driven by exports in terms of goods made, sold, labour and skills including contracting out to the south and Europe?

December GM Annual Economic figures

Total employed 1.14m with 93,000 employers, GVA £47bn (North East £41bn, West Yorkshire £39bn, Merseyside £20bn)

Financial services 224,000 employed, GVA £9bn
Tourism/Conferences 22,000 empoyed, GVA Tourism £5bn and Conference £0.8bn
Health and Life Services 163,000 employed, GVA £4.7bn
Creative and Digital 63,000 employed, GVA £2.7bn
Education 105,000 employed, GVA £3bn
Manufacturing 38,000 employed, GVA £1.9bn
Sport 21,000 employed, GVA £0.5bn

[neil]

UKTI to boost NW team after funding fillip
12th December 2012

Share:By Chris Barry - Editor, North West
Clive Drinkwater, North West regional director at UK Trade and Investment
MORE Government funding announced last week in the Chancellor's Autumn Statement will allow UK Trade and Investment to increase its team of expert advisers in the region, and also to target more new exporters.

Clive Drinkwater, UKTI's regional director for the North West, said 2013 will see added resource and effort toward growing exports from the region, with some 300 first time exporters sought for the Passport to Export scheme, which has this year seen 150 new starters.

UKTI has around 60 expert advisers around the region, and a boost to numbers will be welcomed after a number of major initiatives launched locally and nationally drove renewed interest in international trade. The extra resources will also mean UKTI can run more trade missions, particularly in fast-growing markets.

One such scheme, The Export Challenge aims to find 1,000 new exporters from the region by next April - so far the running total is nearly 600.

Mr Drinkwater said: "We are pleased with the progress towards our aspiration, but our work will not be done just by attracting 1,000 this year, we have to find 1,000 in 2013-14 and the same the year after that.

"It's about getting the message out to as many businesses as we can that exporting is not only vital for the UK economy, but it makes companies more flexible, agile and resilient ."

He was speaking at a lunch in Cheshire for more than 30 business leaders who, as a result of their experience in international markets, have agreed to help UKTI grow not only exports from the region, but also the number of businesses trading overseas.

Mr Drinkwater wants these Export Champions to support his team's efforts in a number of ways, such as mentoring novice exporters, acting as a contact in international locations and taking part in networking events aimed at attracting new exporters.

He said: "Basically I want to throw the kitchen sink at the region, but I need the help of the Export Champions to do this. I may not succeed in what I want to achieve, but if I do, it won't be for a lack of effort."

UKTI's Export Champions are businesses from a wide range of sectors in all parts of the region. They include Lancashire wall coverings manufacturer Graham & Brown, Cumbrian scented candle firm Wax Lyrical, Lymm-based procurement specialist Chase International, Liverpool's oldest company, lubricants firm RS Clare and Altrincham communications company BDB.

The Export Champions programme is unique to the North West.

Mr Drinkwater added: “Exports in the North West were £6.3bn last quarter, up almost £1bn since the previous quarter, and we are still experiencing growth in key markets.

"Exports to China are up by 12% compared to last year, India up 4% and Brazil up 2%. Exports to the USA from the North West are nearly £1.4bn, making this our best quarter in America since 2010, so despite the current economic climate, we are definitely bouncing back.

“The extra funding for UKTI announced in the Chancellor’s statement – an increase of £140 million over two years - reflects how important international trade is to the Government.

"Exports are vital for economic growth and we are delighted with the increased UKTI funding which will provide a further boost to help local businesses and to facilitate economic growth in the region.

[LNGCats]

See shale fraking has been approved, wonder if there will be any effect on the Manchester economy, I'm rage sceptical, buy this article tweeted by Faisal Islam suggests possibly not...

@faisalislam:

Interesting piece on shale, conjuring image of Manchester as the Dallas of the NW: respublica.org.uk/item/Shale-Gas…

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Home > Blog Post > Shale Gas: Why Undermine a British Renaissance? Filter By
Shale Gas: Why Undermine a British Renaissance?

Professor Alan Riley on shale gas and its potential

By Professor Alan Riley 24 Comments
*24*0*0*24

Andrew Rawnsley’s column "The Fracking Dream which is Putting Britain’s Future at Risk", Observer, 9th December is illustrative of much of what is wrong with the British “debate” on shale gas in the UK.

Mr Rawnsley tells us that the prospect of an economic rebirth in the North-West of England is a “dream” of “frack-heads”. There will be no “Dallas of the North* And he argues the jury is out on the environmental risks: There is he says the prospect of contaminated water supplies. Middle England will not put up with the disturbance caused by hydraulic fracturing. A ‘dash to gas’ as envisaged in the government’s new gas strategy will undermine energy security. He argues that the greatest hole in the dream of the ‘frack-heads’ is that the numbers do not add up and that the shale bearing rocks are too thin to extract significant quantities of gas.

In almost all respects the article is factually inaccurate or a grossly distorted version of the true situation.

Firstly, there is no recognition in his article or in the broader British debate on shale of the scale of the impact of the shale gas revolution. This revolution is the most significant event in the energy industry since coal was replaced as the principal transport fuel by oil in the 1920s. It has immense economic and geostrategic effects.* Frankly, even if the United Kingdom or even the entire European Union imposes a ban on shale gas exploration and development the effect on Europe will still be profound. Already liquid natural gas LNG originally destined for the United States is now arriving in Europe to be dumped on our markets putting downward pressure on gas prices. That effect is likely to be magnified over the next few years as more LNG and more shale gas sources become available worldwide.

There is no recognition in the Observer article how widely dispersed and accessible shale gas resources are and nor the scale of them. For the last three decades the West has had to live with the grim 80:10 ratio-that 80% of all the fossil fuel resources on the planet are in OPEC countries and Russia, whereas only 10% of those resources are in OECD countries and China. Shale gas eliminates this deeply destabilising situation. Shale gas production in North America has already resulted in the United States replacing Russia as the world’s largest gas producer. China has even more recoverable shale gas resources at 36 trillion cubic metres (compared with US shale gas resources which are estimated to be 24tcm) and is likely to overtake both US and Russian production by 2030. The Chinese government’s current shale gas strategy envisages 6.5billion cubic meters of production by 2015 and between 60-100bcm by 2020 (total UK yearly consumption is approximately 80bcm).

With widespread and diverse sources of gas coming on stream across the world it makes sense for the UK to seek in its new gas strategy to increase the number of gas fired CCGT power stations. Contrary to Mr Rawnsley’s assertion there is no energy security threat from using more gas and deploying more CCGT turbines.* Gas as a supply fuel is becoming a much more secure supply source not less. As the shale gas revolution gets underway worldwide the world will be awash in gas from numerous sources. Because gas can now come from so many sources it now complies with Churchill’s criteria for supply security of ‘variety, variety and variety alone’. With gas we now have many sources and thereby significant supply security.

Furthermore, there is little recognition in the current debate and none in the article of the potential for reducing C02 emissions. Gas is up to 50% less C02 emitting than coal. C02 emissions are flat in Europe and falling in the United States (as cheap gas forces coal fired power stations offline). Emissions however are rising in India, by 6% and China by 9% (2011 figures). The Chinese are adding two coal fired power stations and the Indians one per week. In this context the C02 emissions of the United Kingdom are marginal compared to the impact of C02 emissions from India and China. The great green hope for shale gas is that the availability of an immense Chinese gas resource base that can be accessed cheaply at scale and with the latest technology will encourage the Chinese to switch from coal to gas, blunting the rise of C02 emissions and giving the world more time to* decarbonize the global economy.

Dealing specifically with the issues raised by Mr Rawnsley.

The Dallas of the North: Manchester could indeed become the ‘Dallas of the North’ and it could lead to major renaissance of the northern industrial base. Contrary to the claims in his article the shale found in the Vale of Bowland is very very thick. The Marcellus Shale on the Eastern Seaboard of the United States, which is now a significant production centre for American gas has a shale thickness of 350ft. According to DECC’s own figures the thickness of the shale in the Vale of Bowland is 6000ft. This makes the Vale of Bowland potentially a world class resource.* It will need further exploration before we can be certain that the gas can be accessed with modern shale gas technology. If it can then the potential for the North-West of England and the whole country is immense.

The point lost in the UK debate which has largely focused around hydraulic fracturing is the significant multiplier effect of cheap energy to the surrounding industrial base. Cheap gas would give British industry a significant competitive advantage. It could lead to the onshoring of energy intensive industries into the United Kingdom and a major inwards shift of foreign direct investment. The multiplier effect has already been in play in the US where cheap gas has fuelled the onshoring of the US chemical industry and other energy intensive industries bringing in billions of dollars of investment; rebuilding the industrial base and providing tens of thousands of badly needed and high paying jobs back to what had been the ‘rust belt’.

The Environmental Risks: There has been a huge amount of hype around hydraulic fracturing across Europe. This bemuses energy industry engineers and geologists as hydraulic fracturing is a well known technique, first deployed in the 1940s. It has in fact regularly been used in the UK, most notably in Wytch Farm in Dorset, Western Europe’s largest but largely unnoticed oil field since the late 1970s.* The Royal Society in its June 2012 paper*Shale Gas in the UK: A Review of Hydraulic Fracturing*is very clear that shale gas can be extracted in a manner which would protect the environment with strong regulation based on existing UK energy rules. Water sources can be effectively protected and the environmental footprint of operations can be minimized.

There are environmental issues that are unique to shale gas such as the scaleability of the drilling operations. There is a need to ensure that the regulatory resources and treatment plants are available. There is also the need to improve the surveillance and sanctions regime due to the fact that the operations are taking place on land. However, all these issues can be dealt with proper regulation and sound administration of good rules.

Disturbance: Mr Rawnsley here is guilty of transferring American practice without taking account of the British context. One of the major factors for the scale of disturbance in places like Pennsylvania is that the subsoil rights are owned by the landowners not by the state. In the UK as in much of Europe the subsoil rights are owned by the state or in the UK case by the Crown. Ownership of subsoil rights can have a huge impact on the scale of disturbance.

Where the subsoil rights are owned by the landowners every landowner leases his rights to particular energy companies. Energy companies end up owning small bundles of leases. They can only drill as a result in a patchwork of leased areas. In such circumstances the disturbance can be significant, with many more drills being employed and a much larger number of crews, trucks and equipment making their way to each well site. With such limited well sites the most modern technologies cannot then be deployed to reduce the footprint operations. For example, modern shale gas technology allows energy companies to drill horizontally for a radius as great as 10km, significantly reducing the level of local disturbance.

In the UK where licence areas are much larger this technology can be fully deployed. As a consequence well pads will be much more productive, much more spaced out, there will be fewer of them and there will be far less disturbance.

In addition, because of the UK’s extensive piped water systems most British shale gas plays will have the water piped in. Middle England will not be disturbed with large numbers of water trucks rumbling through the night.

It is disappointing that the sister paper of the (Manchester) Guardian can take such a negative view of a potential resource base that could transform the economy of the North-West.

My advice to the North West local authorities is that if the Vale of Bowland resource base proves to be accessible to modern shale gas technology then they need to do everything possible to maximize the impact of development. Rather than absorbing negative views of Mr Rawnsley I would recommend they lobby the Chancellor for planning and tax breaks to ensure that energy intensive industries are onshored into the region. If and it still is an if, this resource based is proved, then Manchester may yet rise again to lead another British industrial revolution. It would helpful if the heirs of the founder of the (Manchester) Guardian, John Edward Taylor, did not seek to suppress the potential of such a Mancunian renaissance at its birth.

*24*0*0*24


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DETAILED SUMMARY

Date Published
13 December 2012

ABOUT THE AUTHORS


Professor Alan Riley

Professor Alan Riley is one of the leading competition law scholars in the United Kingdom. He chairs the Competition L...
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[Aaronj09]

I was just thinking about this today, and what place(s) could capitalise on shale gas, and become a hub for shale gas companies - was thinking Preston, but it's too small. Then again, companies have no trouble making Aberdeen Europe's oil capital, despite its isolation and poor transport links. Then again, again, most of the money probably flows outwards.

[LNGCats]

London, one of the most interesting facts I saw in the census numbers yesterday was more people in Chelsea now work in the mining industry compared to Gateshead.

I expect the same here, wealth goes to the city in London.

That is obviously not necessarily a bad thing though in my opinion.

Better have the wealth in London then no wealth at all.

[retroscient]

Originally Posted by LNGCats

Better have the wealth in London then no wealth at all.

I think you have me on ignore so perhaps you won't see this (oh, the indignities a man must suffer) but although I agree with you in theory, I think the practical reality of how London accumulates this wealth is economically detrimental, in the long-run, to the majority. But that's not what you're disputing of course.

I was reading elsewhere that London actually suffers as an economic entity because property prices are so high and council housing stocks so depleted that key workers are pushed out of the city they serve.

The article also suggested that the Kensington & Chelsea "miners" are more likely to be mining industry executives.

Still, we all like to big up our working class credentials...

[LNGCats]

Don't have you on ignore

[jrb]

MEN.

UKFast to take on 150 staff for two new data centres

December 12, 2012

Internet hosting company UKFast has announced plans to recruit 150 staff over the next 18 months as it prepares to open two new data centres.

The Manchester company says it wants to build a workforce of 350 by 2014 to help achieve its ambitious growth plans.

UKFast currently employs 200 people, having created 50 roles this year alone.

The latest boost comes as UKFast, which has more than 4,000 clients and is targeting revenues of £24m for 2012, prepares to open data centres next week at Cobra Court, Trafford Park.

It already has one facility there, two at Manchester Science Parks and another at an undisclosed city centre location.

The new facilities will more than double the company’s hosting capacity, from 9,000 servers to 24,000.

Chief executive Lawrence Jones said the new posts would be across the business, including technicians, programmers, marketers and account managers.

He said: “We’re on a high at UKFast after 13 years of consistent growth, and we’re watching a £14m investment in a powerful data centre complex go live.

“We’re reacting to what our clients need and creating opportunities for them to grow.

“We just want great people who are passionate about being the best, then we’ll train them and find a role to suit them.

“It’s an approach that’s served us well over the last 13 years and I’m incredibly proud of the team we’ve built already.”

[jrb]

MEN.

Manchester to fare better than north west on employment front, says Capital Economics

December 13, 2012

Unemployment in the north west is forecast to increase next year as the region faces another fall in economic output, but the prospects for Manchester are rosier, says a new report.

The city is expected to outperform the region in 2013 thanks to its focus on the professional services and digital sectors, according to a report by Capital Economics.

The economic research consultancy's latest UK Cities & Regions Outlook predicts a 0.8 per cent fall in GDP in the north west, a better performance than this year, with growth of 0.9 per cent anticipated in 2014.

Manufacturing output is forecast to be down two per cent, compared with a three per cent fall this year, but is expected to improve in 2014 to be flat.

However, the report forecasts a rise in unemployment as a percentage of the labour force from 10.1 per cent this year to 11 per cent next, and 11.5 per cent in 2014.

Consumer spending is expected to rise as inflation pressures ease, but house prices are likely to drop five per cent.

Capital Economics said GDP for the UK as a whole is likely to show a modest increase of 0.5pc-0.75pc in 2013.

The report says the north west economy began this year 'reasonably well' but then slipped badly, and it estimates GDP for 2012 will be down by 1.5 per cent.

Analysts at Capital say they fear 2013 'could be particularly painful' for employment and predict a further decline in 2014.

They say that the region has a number of key assets, such as Manchester University and Manchester Airport, but that it is dogged by a huge legacy of old industries. Emerging sectors are likely to be less employment-intensive than traditional ones, their report adds.

It says Manchester has more to offer than most cities outside London, especially in view of its location, strong business services, media and creative industries and conferencing facilities, but adds that the gap with the capital is not narrowing.

[jrb]

MEN.

On the Beach creating 70 new jobs

December 11, 2012

Online travel business On the Beach is to recruit 70 staff over the next 12 months as it aims to increase customer numbers from 750,000 to a million.

The company, which has been put up for sale by its private equity backer ISIS, has moved its operations from the Towers Business Park in Didsbury, Manchester, to larger premises at Orbit Developments' Park Square scheme in Cheadle, Stockport.

On the Beach currently employs 200 staff, having doubled its workforce in two years.

It said the new recruits would be assigned to sales and customer service roles as it gears up for a major expansion drive.

The firm said it is also looking to invest in its marketing and IT departments.

Director Alistair Daly said: “The team are thrilled with our new offices and this new, larger space gives us the opportunity to grow our business over the coming years.

“On the Beach is growing rapidly every year and we are proud to be in the strong position of hiring more staff, particularly at this difficult time for the economy where job security is not always certain.”

The company, led by chief executive Simon Cooper, provides flights, car hire, insurance, airport parking and hotel accommodation at popular beach holiday destinations in Europe as well as at resorts in Africa, the Far East, India, the Caribbean and the US.

It last changed hands in 2007 when it was valued at £40m but is likely to be sold for up to £100m this time around.

[VDB]

How the hell did this one slip?!?

Major Banks plan to move 3,000 jobs out of London

Global investment banks including Bank of America (BofA), JPMorgan and Deutsche Bank are planning to outsource 3,000 jobs from London to other UK cities and towns over the next few years, due to increasing operational costs.

Sources familiar with the matter were cited by Financial Times as saying that BofA is considering to relocate nearly 2,000 back- and middle-office employees as well some jobs of operations, human resources and finance to Manchester over the next decade.

JPMorgan, with a 14,000 UK workforce, is likely to drive nearly 1,000 jobs from London's Canary Wharf to Bournemouth over the next three years, while outsourcing similar number of lower-grade jobs to Asia.

Germany based Deutsche Bank will relocate its 'front office' jobs from London to Birmingham, where it has 1,300 wealth management as well as back- and middle-office staff.

Additionally, it will recruit approximately 25 fixed-income sales traders in Birmingham for institutional clients, while establishing an equity sales team in the region.

According to data compiled for the Financial Times, eight of the UK's 10 largest financial centers have lost thousands of financial and professional jobs over the past three years.

[Lookin Up]

Originally Posted by VDB

How the hell did this one slip?!?

Nice find