The NE economy treads water, regional unemployment becomes a UK outlier, and mixed news in Sunderland

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Nine hundred year old Auckland Castle, in Bishop Auckland, once the private palace of the Prince Bishops of Durham, has reopened after a three year multimillion-pound renovation; the Castle hopes to attract 130,000 visitors a year. The project was funded by a £12.4m heritage lottery grant and £7m from the Auckland Castle Trust.

In Gateshead, £90m could be spent bulldozing a 20-acre site adjacent to the High Street. New housing and green spaces would be created; up to 30 businesses will be asked to relocate. Gateshead Council said it would be working with partners to realise the plan.

In Sunderland, Legal & General has announced it will invest in a plan which includes the development of the old Vaux Brewery. One of the three buildings planned for the project is the new Sunderland City Hall.

Vaux Brewery closed in 1999 after 162 years and the 26-acre site has been vacant since then. In July, online supermarket Ocado announced plans to set up a new centre at Vaux, creating 300 jobs. Overall, spend on the entire project could top £100m.

Also in Sunderland, Hays Travel has announced plans to hire an extra 1,500 staff. The travel agent has already taken on 2,330 former Thomas Cook employees but now plans to hire more staff, of which 200 people will be at its head office in the city.

Not such good news for the area was energy firm Npower’s decision to cut up to 4,500 jobs as part of a restructuring plan. Three call centres are under threat of closure, one of which is at Houghton le Spring, where 2,500 are employed.

Chinese firm Jingye says will invest £1.2bn in British Steel after it provisionally agreed to rescue the steelmaker. Hundreds of workers are employed by British Steel in the North East, at sites near Redcar; at Skinningrove, east Cleveland; and at Blaydon. The new owners did not put a number on how many jobs would be saved.

The Stats

Following its first publication of quarterly GDP estimates for the regions in September, the ONS has now published its next estimates for the North East, the other eight English regions, and Wales, for the year to March 2019. GDP figures have been available for the UK since the 1940s, for Scotland since 2002 and Northern Ireland since 2013.

The latest available figures showed the NE economy grew by 1.5%, up from 0.9% the previous quarter. This placed the NE seventh (previous ranking eighth) out of the twelve UK ‘regions.’

London topped the table with growth of 4.2% whilst at the bottom the Yorkshire and Humberside economy declined by 0.3%. Propelled by a drive to meet the original March 31st Brexit date, UK growth over the same period was 2.2%.

The ONS figures also highlighted that the quarter to March 2019 was better for the region than the previous quarter. The North East economy grew by 0.4% in January to March 2019, following growth of 0.2% in October to December 2018.

In this period, the health and construction industries grew by 6.9% and 3.2% and made the largest positive contributions to growth, whereas the education and energy industries recorded negative growth of 4.3% and 7.9%.

The services sector contributed the most to GDP whereas the production sector was a drag on the regional economy.

Estimates published by ESCoE last month for the year ended September 2019, a more recent period than the ONS figures, ranked the NE eighth (previous ranking was ninth) with growth of 1.2%, which suggests the region has had a slightly better summer relative to other parts of the UK.

Using this metric, UK growth was 1.45%. Growth in London (ranked first) was 2.32%, which compared with the South West of England (bottom) at 0.41%

More data from the ONS showed unemployment in the NE increased by 7,000 to 75,000 between July and September; the increase of 0.5% took the overall rate to 5.9%, the highest rate in the UK. The next highest rate was London at 4.5%. Northern Ireland had the lowest rate at 2.5% with the UK rate at 3.8%.

The South West had the highest employment rate at 81.0% which compared with 71.2% in the NE. UK employment was estimated at 76.0%.

In September, average earnings in the North East were up by £14 to £551 per week. London had the highest average earnings of £830. The lowest average earnings of £527 were recorded in Wales. In the UK overall, average earnings grew by 3.6% or by 1.8% after inflation.

NE average property prices were flat over the month at £132,769, which took annual growth to 2.0%. In comparison, UK prices fell by 0.2% to £234,370 during September, an annual growth rate of 1.3%.

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