Get in touch: send your photos, videos, news & views by texting YORK to 80360 or send an email»
Is York's economy in recovery?
9:53am Thursday 12th September 2013 in Features
The UK economy is turning the corner at last, Chancellor George Osborne claimed at the start of the week. But have the first green shoots of recovery reached York? STEPHEN LEWIS reports.
The UK economy is turning the corner, George Osborne claimed on Monday. Activity grew by 0.7 per cent in the second quarter of the year, with predictions economic growth could reach one per cent in the third quarter.
According to the OECD – the Organisation for Economic Co-operation and Development, which represents 34 countries around the world and aims to stimulate economic growth – the UK’s economy is expected to grow by 1.5 per cent in total this year. Previously it was expecting annual growth of just 0.8 per cent.
Jaguar’s announcement this week that it would be investing £1.5bn, including creating 1,700 jobs at its Solihull plant, seemed to underline the Chancellor’s message that things may be improving – as do the latest job figures, which show unemployment falling.
But have the beginnings of an economic recovery reached York? And if so, are ordinary men and women feeling the benefit?
We spoke to a number of York businesses – and also tried to gauge how ordinary families are faring…
‘The green shoots are there’
At the height of the slump, Linden Homes North was building only about 100 homes a year across York and North Yorkshire.
Compare that to the 350 homes completed in the year up to June, and you get a sense of how the construction industry is beginning to regain its feet.
Best of all, newly-built homes are selling well, says MD Ian Hessay: his company has just sold all 56 homes on one York site – and at another site has sold 24 two- and three-bed homes in the last three months.
“Our housing sales in York have been very strong over the last 12 months, really,” he says. All of which is good news for jobs. His company has been expanding, and taking on more people, Mr Hessay says.
“We also have a big apprenticeship drive on at the moment.”
He has a word of caution, however. The sale of new-build homes has been boosted by the Government’s Help To Buy scheme, which helps first time buyers who have trouble finding money for a deposit. If that scheme runs out of money or comes to an end, it is hard to predict what the impact might be, Mr Hessay says.
But overall the picture is looking much better.
“The green shoots are there.”
THE ESTATE AGENT‘ - Things beginning to pick up’
York-based estate agency Hunters had to rethink its business model during the slump.
“We got used to a low level of turnover,” admits managing director Kevin Hollinrake.
“We were running at about 40 per cent below our usual rates for four years.”
It moved to a franchising model in response – going from a company with 20 offices in 2007, to one which has 104 franchises across the country today, although it only owns and operates six of these directly.
There is absolutely no question that, at long last, things really are beginning to pick up, Mr Hollinrake says – although it has only happened in the last few months.
“It was much of a muchness for the first quarter, but from April onwards there has been a real upturn.” In fact, he estimates that since May, there has been a 31 per cent upturn in business.
That is not only good for his business, he says – but it is also good for people who have been keen to buy their first home, or to move home. More people are buying and selling across the range, from first-time buyers to buy-to-let. Part of the key is that potential buyers are more confident, and so are more willing to offer vendors something near their asking price.
House prices are going up as a result. So is there a risk of another housing bubble? There is, he admits. But we have been forewarned by what happened before.
“So hopefully we won’t see that.”
BUSINESS LEADERS - ‘More confident about future’
Businesses in York are still facing challenges, says Susie Cawood, head of the York and North Yorkshire Chamber of commerce.
“But York has weathered the recession much better than many other places in the country.
“Overall… our members are more confident about the future.”
York has a lot to be confident about, she says.
“Our retail offer is about to improve and expand, we are attracting millions of tourists and specialist global insurer, Hiscox, has chosen York to open its biggest office in the UK outside of London.”
There is no doubt that, overall, the economy is growing, said Andrew Palmer, head of the Yorkshire branch of the Confederation of British Industry (CBI). The latest job figures suggest that is beginning to be translated into new job opportunities, too.
The challenge will be to keep the growth going. There needs to be real investment in infrastructure, plus better Government support for small businesses which want to break into the export market, Andrew says.
“But business confidence is up, and I would expect growth to continue next year.”
THE RETAILER - ‘Light at end of tunnel’
Last Christmas was not great, admits Frank Wood, chairman of the York Retail Forum and owner of Braithwaites Jewellers in Goodramgate.
In fact, until the Forum’s most recent meeting a couple of weeks ago, the talk was all of doom and gloom. That has suddenly changed. There were mixed opinions at that most recent meeting, as you’d expect. “But people felt more optimistic looking towards next Christmas. They can see the light at the end of the tunnel.”
There are reasons for that, he says: a definite feeling among retailers that people are spending more. “Our figures are based on turnover, and sales, not just footfall – and the feeling was that we are just starting to see an increase.”
THE HAULIER - ‘There’s still a lot of uncertainty’
Times are still tough in his business, says Paul Rhodes, director of A Rhodes Haulage.
“Yes, things have been slightly better this year than last year. But there is still a lot of uncertainty, which can see you busy for a time, then quiet for a time.”
His company specialises in moving portable buildings, but during the slump it learned to diversify, he says, carrying heavy items such as generators and bridge sections.
The company, which employs about 40 people, survived the recession without having to make anyone redundant, although a couple of drivers who retired were not replaced.
And is he optimistic for the future?
“Things seem slightly better,” he repeats.
“But I would not go as far as to say that I think there has been a turn in the economy.”
‘People are out spending more’
It has been a great year for tourism in York. The good summer, plus events such as the long-awaited arrival of the Mallard at the NRM, saw visitor numbers soar in July.
The number of visitors to York’s major attraction that month alone passed 400,000 – and was more than 50 per cent up on July of the previous year.
Hotels also reported very high occupancy rates, says Visit York chief executive Gillian Cruddas. One major York hotel reported occupancy rates of more than 97 per cent.
“We haven’t had that sort of thing for a while.” Overall, the feeling is that people have been out and about more, doing more and spending more, she says.
The challenge is to sustain things, and to keep thinking of new reasons for people to visit York. The Tour de France next year will certainly help.
“But we need to think beyond that,” Mrs Cruddas says.
Focus on job prospects – and living standards
The latest unemployment statistics, out this week, show a fall in unemployment nationally.
The number of unemployed people across the country fell by 24,000 between May and July, to 2.487 million.
In York, joblessness is also continuing to fall. In August, just 2,451 people were out of work and claiming Jobseekers Allowance (JSA) – about 1.8 per cent of the working age population. A year ago by contrast, in August 2012, more than 3,250 people in the city were out of work and claiming – while in February 2010, the height of the recession, the figure stood at 4,134. So unemployment is clearly going down. But the picture is more complicated than that, says George Vickers of the York Citizens’ Advice Bureau (CAB).
The problem is many new jobs are part-time – and often they don’t really pay enough for people to make a living. There is also the problem that wages have not been keeping pace with the cost of living: so even some of those in full time work are struggling.
The York CAB has been hugely busy since benefit changes came in in Apri, Mr Vickers says – and the vast majority of people who come to the organisation for help are having economic difficulties. “So while there may be more economic activity, it is not filtering down in terms of improved living standards,” he says.
Colette Gray, of Future Prospects, which helps York’s long-term umemployed people find work, agrees with much of that.
She said: “There are more people getting work, but the reality is that those that are gaining work are finding that hours are mostly part time and temporary, which is the way the landscape has been for a while, and there is tremendous competition for jobs.”
CHLOE SHEPHERD hit the streets of York to ask if ordinary people were starting to notice any signs of better times
Diane Hillyer, 66, retired, from Selby, said: “I’m still struggling. Prices have gone up and keep going up and people can’t afford it.”
Kirsty Lount, 40, a sales assistant, from Thorpe Willoughby, said: “On a personal level I do think things have improved. Also working in a shop we compare sales from the year before and things have dramatically improved on last year.”
Steven Pugh, 50, a wood machinist from Dunnington, said: “I don’t find it changing much. I don’t find it hard but I’m steady in the job I do so I don’t really feel affected.”
Chris Kneeshaw, 67, retired, from Malton, said: “When I retired pensions were good so it doesn’t really feel better or worse for me. I do understand why people are struggling though”
Heather Newton, 21, a tour guide, from York, said: “I’m a recent graduate and I’m in the first job I could find. It isn’t my main ideal job but I love it. It was a lot easier to find a job than I expected. I don’t think it’s too difficult to find jobs at the moment especially if you have a degree, I do think things are improving.”
Comments are closed on this article.