Shropshire Star

Area playing part in economic recovery

Shropshire is playing its part in helping the UK economy recover, bosses said today after a major milestone was hit in the quest to restore the nation's business landscape to strength.

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After a 0.8 per cent rise in GDP in the second quarter helped the economy to overtake its pre-recession peak by 0.2 per cent, county business leaders said that Shropshire's own economic performance was pulling its weight in helping the recovery.

Richard Murrall, head of company and commercial law at Lanyon Bowdler Solicitors, part of the key service sector which outperformed the wider economy with growth of one per cent, said: "We work with a large range of companies across Shropshire and it is clear from our dealings with businesses that confidence is rising.

"We act for a number of businesses who are enjoying great success trading internationally, which is encouraging for the UK economy as a whole. The service sector in particular is performing strongly and we hope this upward trend will continue.

"We are also seeing companies who have struggled desperately over the last few years now being able to recruit heavily because of new demand for their services, and there are certainly signs that the construction sector is growing strongly."

Richard Sheehan, chief executive of Shropshire Chamber of Commerce, added: "We are in a good place at the moment, certainly that's the evidence we see from our survey work.

"There are still challenges, and some businesses are reporting cash flow pressure as they get busier, but again that's a nicer problem to have."

Nationally, expansion in the manufacturing sector slowed to 0.2 per cent and construction shrank by 0.5 per cent, dragged down by a weak May for builders.

The figures mean that while the services sector is now 2.9 per cent ahead of its level at the start of 2008, manufacturing is still 7.4 per cent behind and construction lagging by 10.7 per cent.

But Richard Homden, managing director of Shrewsbury-based Salop Design and Engineering, said that his own experiences suggest that the manufacturing sector is still performing well after a run of successes stretching back into last year.

Manufacturing is a broad spectrum of different industries, but that's not something we're seeing at the moment. We are still seeing strong growth.

"Automotive, which is a market we serve, is still buoyant, and Jaguar Land Rover and Nissan are very strong, and we have also diversified over the last 18 months to broaden our customer base.

"The recession hit us very hard, as it coincided with customer contracts coming to the end of their life cycles, but now we are investing in our powder coating facility again, and will be looking to spend £1 million before the end of the year, which we wouldn't be doing if we weren't confident we would benefit from it."

The continuing pace of the recovery - with growth maintaining the pace of the first three months of the year - will feed into expectations about the timing of an interest rate rise, and accelerating signs of economic improvement have seen these brought forward.

However, critics of the Coalition point to evidence that it is not yet filtering through to ordinary households as real terms pay is falling.

Following the latest announcement, the Unite union's general secretary Len McCluskey said: "Working people are doing the heavy lifting in our economy. They are working harder but getting poorer so if the economy is growing, it is not them feeling the benefit.

"Let's be clear: there has been no economic miracle performed here. Quite simply, as our population grows more people are working but they are working for lower wages with zero-hour, insecure jobs at epidemic level and an historic collapse in living standards not seen since Victoria was on the throne."

Shadow chancellor Ed Balls said: "At long last our economy is back to the size it was before the global banking crisis - three years after the US reached the same point.

"But with GDP per head not set to recover for three more years and most people still seeing their living standards squeezed, this is no time for complacent claims that the economy is fixed.

Prime Minister David Cameron tweeted: "It's encouraging news that the economy is larger than pre-crash levels. Our long term economic plan is working and this is a major milestone."

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