Economic Briefing

Indicator Overview

D A T E A p r i l 2 0 1 1

I S S U E 1

Summary

The Tees Valley economy

experienced a number of

positive developments in

March. These were both

in terms of large-scale job

creation, with the

completion of the deal

by SSI to take over the

Tata steel manufacturing

plant in Redcar (creating

800, and safeguarding

700, jobs) and the location

of the Hitachi Trains

project at neighbouring

Newton Aycliffe, as well

as announcements from

government. The latter

saw the Centre for

Process Innovation at

Wilton form part of the

new UK Technology

Innovation Centre and the

Tees Valley designated

by the Chancellor as a

location for the

establishment of a new

Enterprise Zone to attract

new jobs and businesses.

In addition, a positive start

to the year was had by

Durham Tees Valley

Airport, with figures out

this month showing

passenger numbers up

24% in February

compared to a year earlier,

and work began on the

£300m housing and

regeneration scheme

NorthShore in Stockton.

UnemploymentClaimant Count has begun to rise again.

After falling from the peak at the beginning

of 2010, unemployment has started to rise

again in recent months, reaching the levels

seen at January 2010. Unemployment in

Tees Valley remains higher than the North

East as a whole and the gap between Tees

Valley and the average for the whole of

Great Britain is increasing.

Reported jobs gains and lossesLittle overall trend in job gains and

losses is evident, although there have

been more job gains than losses over the

last quarter. Any trend in job gains and

losses is often hidden by large individual

announcements, such as the SSI takeover

of TCP in February creating 800 jobs. In

addition, many of the job losses have come

from the public sector, where although the

losses have been announced many will

actually take place over 4 years.

EmploymentSlight increase in Tees Valley's

Employment Rate. The Tees Valley's

employment rate fell steadily during the

recession, however this fall appears to

have ceased. Employment rates in the

Tees Valley have broadly followed the

national trend, whilst the North East's

employment rate appears to be increasing

at a slightly faster rate.

GVA Per HeadGVA per head increasing but still well

below national average. The Tees

Valley's GVA per head relative to the UK

fell markedly up to 2002. Whilst there has

been some recovery, the Tees Valley is stil

below the North East as a whole and

significantly below the UK level.

This Tees Valley Economic

Briefing aims to provide a

brief summary of activity in

the Tees Valley economy

for April 2011 including

statistical trends and key

announcements for the

month.

Data Direction

PreviousQuarter

2010/2011

PreviousQuarter

2009/2010

PreviousQuarter

2010/2011

2000/2008

Reported job gains and losses are based upon announcements as reported in the press and aretherefore not designed to be fully comprehensive.

Source: Office for National Statistics

Source: Office for National Statistics

Source: Tees Valley Unlimited

Source: Office for National Statistics & Tees Valley Unlimited

For further statistical information about the Tees Valley economy visit www.teesvalleyunlimited.gov.uk

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April 2011 - Issue 1Economic Briefing

Cavendish House

Teesdale Business Park

Stockton-on-Tees

Tees Valley

TS17 6QY

Tel: 01642 524400

E-mail: info@teesvalleyunlimited.gov.uk

Web: www.teesvalleyunlimited.gov.uk

Engineering & Manufacturing

March’s considerable job creation was

largely built on companies in the

engineering and manufacturing sectors

expanding and securing new contracts.

Leaving aside SSI, the likes of Darlington

engine assemblers Cummins, Stockton

car-parts manufacturer Nifco and

Hartlepool oil and gas platform

manufacturers Heerema created the

majority of jobs this month with 120, 120

and 190 respectively. In addition, Radiola

Aerospace was a successful inward

investor, setting up in Stockton, and

companies across Tees Valley were invited

to register their interest in supplying the

Newton Aycliffe-based Hitachi Trains

project. 22 job losses were announced,

however, at drinks manufacturer Tetley in

Stockton and there is a threat to 200 jobs

at Redhall Engineering Group in

Middlesbrough due to a contract dispute.

Nationally, the CBI reported increased

orders and growth expectations from

manufacturers, while EEF reported

stronger confidence among engineering

firms in the North East driven by a rise in

export orders.

Oil & Gas

Alongside Heerema, who secured a

contract with Centrica to fabricate an

offshore oil and gas platform, AMEC won a

£32m contract to supply the Teesside Gas

Processing Plant (TGPP) at Seal Sands,

which will process natural gas from RWE’s

field in the North Sea. Meanwhile, due to a

drop in demand, Teesside Power Station

is being partially mothballed with 100 jobs

at International Power looking uncertain.

Renewable Energy

Two potential waste-to-energy projects

announced their intention to set up in Tees

Valley this month, including Earthly

Energy’s project to turn food and garden

waste into biogas, creating 84 permanent

jobs. This builds on the positive momentum

built up sub-regionally over recent months

with the expansion of the likes of Ineos Bio,

Air Products and SITA, as well as the

plans of PYReco and SembCorp. In

addition, Biffa opened the UK’s first fully

integrated sorting and recycling facility for

mixed plastic packaging at Redcar in

March, creating 28 new jobs. Meanwhile,

offshore wind suppliers continue to prosper,

with growth at subsea support specialists

Tekmar Group, who have a site in

Darlington, and continued success at the

likes of JDR Cables in Hartlepool and MPI

Offshore in neighboring Stokesley.

Darlington based consultants Eco

Environments are also looking to increase

staff.

Logistics

PD Ports’ £29m expansion of their

container terminal at Teesport, which aims

to increase container capacity from

235,000 TEU to 450,000 TEU which began

in February, continues apace.

Professional Services

The professional services sector in the

sub-region was relatively quiet in March,

although digital and creative companies

continue to prosper. A total of 25 jobs were

created at digital firms Via Creative in

Redcar. Thap and iBod in Middlesbrough,

tying into the expertise of Digital City in

Middlesbrough and the plans for The Hub

in Redcar. In addition, Webworks in

Darlington is creating a further 16 posts. A

couple of contact centre businesses this

month showed contrasting fortunes with

new start-up Call Agents UK employing a

further 30 people in Middlesbrough, while

Darlington’s Infoserve are losing 10 staff

as a result of declining profits. With the

likes of law firm Dickinson Dees reporting

increased volumes of work, such positive

findings contrast with national data

suggesting a slowdown in growth in the

service sector.

Summary cont....

Over 550 jobs were

reported as created in

March across a number of

sectors, with the potential

for over 100 more in

ongoing renewable energy

projects. Around 30 job

losses were announced

from a handful of Tees

Valley firms this month, but

possible losses could climb

further with over 300

employees at

Middlesbrough-based

Redhall Engineering

Group, Darlington's Four

Seasons Healthcare and

Teesside Power Station

at Wilton respectively

under threat of

redundancy. Regionally,

according to Lloyds TSB’s

latest business index, the

North East economy grew

at its fastest pace in

February for almost a year,

above the national

average, driven primarily

by an increase in output

and orders in the

manufacturing industry.

Misc

A Barclays Wealth study

this month reported that

the number of millionaires

in the North East has

increased by 17% over the

past 2 years, the fastest

growth outside of the

South East, and is

predicted to be the fastest

gainer between now and

2020. The North East

does, however, remain

bottom of the English

regional league table for

millionaires.

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