The revised UK GDP figures for April-June increased the real rate of growth slightly from +1.1 per cent to +1.2 per cent. This strong figure reflected an even better performance by construction of +8.5 per cent, recovering from the poor weather earlier in the year.

Manufacturing and business services did well (+1.6 per cent and +1.5 per cent respectively) in the second quarter. In contrast, the rest of services were relatively subdued, including a large fall of -2.2 per cent in transport and communications.

Consumer spending was +0.7 per cent higher last quarter. Other expenditure measures were subdued with investment still negative (-2.4 per cent), government spending slowing noticeably (+0.3 per cent) and net exports (+0.2 per cent) also only modestly increasing.

It is likely that consumer spending will be boosted in the last four months of the year ahead of the VAT increase in January. This trend may make 2010 growth higher than most forecasters currently expect, albeit at the expense of output in 2011 when tax increases, spending cuts and more uncertainty about incomes and employment will damage demand.

 

 

The ground-breaking course – Accessing New Business – has been inspired by the University of Bath’s contract to act as a pre-Games training camp for the ParalympicGB team.  

So it was fitting that Chris Holmes, Director of Paralympic Integration at LOCOG, should present an Inspire mark certificate to Accessing New Business during a visit to the ParalympicGB team at their summer training camp yesterday. 

His visit was part of a two-week tour of the UK marking the two-year countdown to the Paralympic Games which start on 29 August 2012.

Chris said: “Delivering highly accessible Games with world-class facilities for disabled people was a fundamental part of London’s bid to host the 2012 Games.

“This project will leave a positive legacy as a result of 2012, with businesses in Bath more aware of disability issues and consequently taking practical steps to make themselves more accessible to all of society.” 

The course consists of a series of workshops aimed at helping businesses provide information, facilities and services for visitors in ways that are more accessible for people who have difficulty with mobility, sight, hearing and learning.

The brainchild of the South West RDA (Regional Development Agency) and South West Tourism, the course involves a range of businesses across the city.  Workshops focus on improving accessibility in marketing information and communication, customer service, and facilities and services.

“If this pilot is successful, it is hoped to roll this project out across the South West,” said Robin Bischert. Chief Executive of Bath Tourism Plus, which is delivering the course.

“Improving the accessibility of the tourism destinations within the region makes good business sense because 11 per cent of all overnight domestic trips in England in 2009 were made by visitors with access needs, or those accompanying someone who had access needs.

“This amounts to 11.3 million trips, contributing almost £2bn to the economy last year, with a quarter of these visitors travelling to the South West.”

Chris Holmes’s visit was organised by Team South West, the partnership of regional organisations led by the South West RDA, which aims to maximise the business, sporting, cultural and social opportunities of the Games to deliver a lasting legacy for South West England. 

This beats market expectations which had anticipated some downward pressure from the reported falls in consumer confidence and a drop-off from the boost provided by the World Cup and the good weather in May and June.

The data marks a small milestone in that the volume of sales has now recovered to the level seen in October 2009. The detail behind the headline figures presents a more mixed picture, with sales of food and household goods falling in the month. For the second month now, prices have also been falling overall in the non-food sector.

Whilst this is good news for consumers and for inflation, it does indicate that some retailers are having to discount in order to shift their stock.

Labour market statistics released today show a further fall in the national claimant count, extending the run of falls to six months. However, with each successive months these falls have been getting smaller and the latest is only 3,800 compared to falls of 30,000 to 40,000 earlier in the year. This adds to growing evidence that the second quarter ended weaker than it started and the likelihood is that economic growth going into the second half of 2010 will not be strong enough to sustain any improvement in the jobs market.

Data from the Labour Force Survey for the three months to the end of June shows that employment increased by 184,000 compared to the previous three months. This compares to a reported increase of 160,000 for the three months to May, so most of the gain had already been reported. The fact that the majority of the additional jobs have been part-time means that the impact on the jobs shortage is less than the headline numbers might suggest. Meanwhile the number who have been unemployed for more than twelve months continues to rise, reaching the highest figure since March 1997. This is indicative of the emerging problem of entrenched unemployment wherein being unemployed for a long period makes returning to work more challenging, even when new job opportunities are available.

The data for the South West shows a stronger second quarter jobs performance with 32,000 additional people in employment compared to the previous three months. However, there was only a marginal fall in total unemployment so this appears to be a partial reversal of the earlier movement of people from employment to inactivity rather than to unemployment. As with the national picture, the claimant count in the region fell again in July but this fall was marginal at only 300 compared to recent monthly drops of 2,000 to 3,000. Overall the South West has a claimant rate of 3.0% and an unemployment rate of 6.1% which are the lowest rates for the UK regions.

 

Summary:
July data signalled marked growth of the South West private sector economy. The headline seasonally adjusted Business Activity Index – which measures the combined output of the region’s manufacturing and service sectors – posted 54.5, up slightly from 54.3 in June, and above that reported for the UK as a whole for the first time in nine months. The latest rise in activity was supported by a further increase in new orders received. However, this was boosted mainly by the region’s manufacturing sector, with service companies continuing to record lower activity and new work. Nonetheless, the rise in overall activity supported a further increase in employment. Meanwhile, input cost inflation eased for a third successive month.

Companies in the South West reported a marked rise in activity during July, which was the fifteenth in successive months. Moreover, the rate of output growth accelerated for a second consecutive month.

A further increase in new order volumes supported the rise in output. Incoming new business has now increased in each of the last ten months, with the latest expansion the strongest in three months. Anecdotal evidence suggested that the rise in new orders reflected an ongoing improvement in general economic conditions.

July data signalled a marginal rise in employment within the South West. However, the latest increase in staffing levels was the slowest in the current five-month sequence of rises. The increase in headcounts was largely focused in the region’s manufacturing sector.

Despite accelerated growth in new order volumes, backlogs of work fell again in July. Nonetheless, the latest reduction in outstanding business was weaker than that indicated for the UK as a whole, and slower than the long-run average for the series.

Input costs faced by companies in the South West continued to rise in July, with input price inflation now sustained for nineteen successive months. However, the latest increase in costs was the slowest in eleven months. Reflective of the further rise in input prices, companies in the South West reported another increase in charges. However, the rate of output price inflation was only marginal, with the extent of the latest rise limited by strong competition for new business. Nonetheless, charges have now risen for six successive months.

Comment:
Commenting on the South West PMI survey, Shane Vallance, Economics and Evidence Manager at South West RDA, said:

“The story of the last few months – that of a tentative recovery primarily driven by the manufacturing sector – continued into July. It’s encouraging to see this was driven by growth in new orders, rather than businesses reducing backlogs. On the other hand, the national picture shows momentum in the economic recovery is slowing.”

Envision was set up in 2002 to provide SMEs with advice and support aimed at improving their resource efficiency. This guidance covered everything from reducing waste paper to saving water.

The programme provided two levels of service – the first giving two hours of advice and the second giving between 3 and 10 days of intensive support.

The advice amounted to an average of £21,000 in savings for each business (see case studies below) given intensive support, as well as new business opportunities and a huge cut in their environmental impact.

Of those receiving intensive support 78 per cent said the programme had helped them to cut energy consumption, reduce the volume of waste going to landfill and achieve bottom line savings.

A full project evaluation shows that over the life time of the programme businesses saved up to 192,179 tonnes of waste, up to 1.7 million cubic metres of water, almost 130 million kilowatt-hours of energy and up to 1.8 million litres of fuel. 

This amounts to up to £35 million in savings to date – an average of £21,000 per businesses given intensive support.

Alasdair Brown, waste manager at the South West RDA, said:

“Earlier research showed that many businesses did not realise the impact they were having on the environment and did not know where to get advice so the Envision service was much needed. 

“The figures speak for themselves but what is particularly interesting is that many of the improvements have come as a result of low or no cost behavioural changes rather than expensive equipment, proving that once people understand the environmental costs of their behaviour they are willing to change.”

The evaluation study, conducted by independent environmental evaluation consultancy   Ekosgen, calculated that if these businesses continue with their energy saving practices and potential new sales activities for more than 10 years then they could benefit by up to £105 million.  This equates to a massive carbon dioxide saving of 182,000 tonnes, representing between 0.9 per cent and 1.5 per cent of the South West’s overall carbon use in the industrial sector and a saving to society of between £6 million and £9.7 million.

The project represents excellent value for money for the region with a return on the RDA’s investment of up to £4.47 per £1 invested.

CASE STUDIES

Bristol Airport

Envision advisors have worked with Bristol Airport on improving their resource management in the existing terminal building and offices, as well as advising extensively on the airport’s environmental management and development programmes.

Measures taken as a result of the Envision programme include:

• refurbishing all lighting in the terminal building to include low energy solutions and intelligent management systems
• refurbishing the toilets in the passenger terminal including the fitting of water saving devices
• planning consent granted for a new 20 metre wind turbine at the airport to contribute to renewable energy generation
• undertaking to source 20 per cent of additional energy required for the new airport terminal building (under development plans) from renewable or low carbon sources
• development of the airport environmental management system following ISO 14001 principles.

Alan Davies, planning and environment director, said:

“The Envision programme has inspired us to take some major steps in terms of cutting our energy consumption, water use and waste. We now have robust systems in place to ensure we are doing all we can to reduce our impact on the environment.

“The advice was invaluable in drawing up our plans for the airport’s development, which have now been given the go-ahead, ensuring we are using the greenest and most efficient solutions to meet the new facility’s needs.”

Autoglaze, head office in Bournemouth, with branches in Poole, Southampton and Nottingham

Duncan Graham, Director, Autoglaze Limited said:

“We’ve made massive savings in terms of our waste management costs – slashing the volume of material we send to landfill. We now recycle 80% of our waste, whereas before it was as little as 10%, saving over £1000 already and it’s all down to the support we received from Envision. We’ve hugely reduced our carbon footprint and cut our diesel fuel and electricity use by 10% per head.  

“Getting the ISO environmental certifications, with the help of Envision, has also enabled us to compete against national companies for bigger tenders.”

 

The meeting was held within the context of the significant changes proposed to arrangements for the delivery of economic growth and regeneration and the reduction proposed for public sector budgets.

Of particular relevance for PCDC is that, of its three funding partners, Plymouth City Council and the Homes and Communities Agency (HCA) face significant budget constraints, in line with Government policies, and the South West RDA is due to be abolished by March 2012.

Given the difficult spending decisions which will need to be taken across the public sector nationally the Board was informed that there was no realistic prospect of further public sector funding for PCDC from the HCA and the RDA, beyond the initial three-year commitment from the funding partners up to March 2011. Despite some support being offered by the private sector, there was no realistic prospect of sufficient funding being generated to meet this gap.

In view of this, the Board reluctantly took the decision that the Company would be unable to continue to operate into the new financial year and that the process should begin to wind up the PCDC at the earliest opportunity. It is expected that PCDC will cease trading shortly.

PCDC chairman James Brent said: “PCDC was tasked with a significant challenge when it was formed to take the lead on economic growth and regeneration for Plymouth. It was a challenge we accepted with enthusiasm and I know that the Board, the PCDC team and our funding partners have been united by a passion to bring improvements to Plymouth for the benefit of all those who live, work and visit here.

“Achieving this sort of step change for Plymouth’s economy was always going to be a long term project. So it is very disappointing to have to bring PCDC’s work to a close after a period of less than three years, which unfortunately also coincided with some of the most difficult economic conditions in living memory.

“The positives are that significant groundwork has been put in, partnerships built and progress made in several areas of PCDC’s activity. This includes the development of regeneration plans, work with the creative and other sectors of the economy, the Digital Plymouth project, various inward investment projects and the development and roll-out of the city’s new brand identity. We will work with our partners to ensure that the benefits of these projects are maintained and taken forward.

“At a time of uncertainty, there are three points on which I have absolutely no doubt. First the need to drive economic development in the city is at least as important now as it was when the PCDC was formed. Second, the city has got the ingredients necessary to achieve a material improvement in its economic performance. Third, this improvement will only be achieved through genuine partnership between the public and private sectors.

“I thank my colleagues at the PCDC, my fellow Board members and the PCDC’s partners for all the efforts which they have all made to make Plymouth an even better city.”

Plymouth City Council Chief Executive Barry Keel said: “We remain fully committed to working in partnership with the private sector, however, in the current climate we have to be realistic about what the private sector is likely to fund and what the public sector will be able to fund. We have restructured the Development Department of the Council to deliver on the growth agenda. We will do all we can to continue this even in the harsh economic climate that we face. We are also working closely with partners in exploring the potential benefits from the establishment of a Local Enterprise Partnership.

“We would like to thank the funding partners, the staff and everyone who has been involved in the CDC for what has been delivered.”

Ian Thompson, Devon Area Director for the South West RDA, said: “It is disappointing that the PCDC Board has had to take this decision today but there has clearly been a great deal of change in the arrangements for delivering regeneration and economic growth in our region since the PCDC was first envisaged, not least the decision to close the South West RDA.

“There are a number of good projects already under way in Plymouth which have been led by the PCDC team and we are keen to help the city put in place the new arrangements necessary to build on these foundations and continue this work.”

Colin Molton, HCA director with responsibility for investment in the South West, said: “The HCA remains absolutely committed to working with local partners to support important projects which bring economic benefits to the area.

“This is demonstrated by our continuing short term support for PCDC, at a time of reduced resources to invest in projects.

“Despite this decision, our investment in the City of Plymouth continues to be significant and I look forward to continuing to work with partners to help drive forward the economic and social regeneration of the city in the years ahead.”

James Brent concluded by saying: “Despite having to take this difficult decision today, the Board were very clear that there are still some great opportunities in Plymouth, that the city remains open for business and there is every reason for Plymouth to be positive about its future.”

Now in its sixth year, the nationwide competition run by Enterprise UK rewards cities, villages, towns and neighbourhoods that have tackled the economic downturn head on and are successfully creating jobs, boosting local business and nurturing entrepreneurial talent as the UK emerges from recession.

Taunton was recognised for its success in encouraging budding and fledgling entrepreneurs, particularly through the Business Initiative for Schools, which both develops business awareness and encourages the development of business ideas amongst 14-18 years old, via Dragons’ Den style activities.

Cllr Norman Cavill, who holds the economic development portfolio at Taunton Deane Borough Council, congratulated all who had made the win possible, particularly Stephanie Payne, the Council’s economic development lead officer, Lee Porter, business and enterprise teacher at Bishop Fox’s School, Taunton, and Peter Heath, Director of Business Initiative for Schools.

“Winning the regional heat of the Enterprising Britain competition is a fantastic achievement and we are delighted to have been recognised for our work in bringing change to the area, creating jobs and transforming the community. Our initiative doesn’t stop here though – we will continue to champion enterprise and look forward to the national finals of the competition,” said Stephanie.

Cllr Cavill added: “This is a great achievement. I congratulate all involved, especially the Economic Development team for their commitment to improve the economic fortunes of the Borough.”

During August Taunton will go up against the other 11 regional finalists from around the UK for the Enterprising Britain 2010 national title. The overall winner will then go on to represent the UK at the European Enterprise Awards next year.

Andrew Youl of the South West Regional Development Agency said: “The success of Taunton demonstrates what can be achieved if people work together to improve the social and economic prospects of their community. We are confident that their great example will encourage more entrepreneurial behaviour in the region that will continue to benefit generations to come.”

For more information about the 2010 Enterprising Britain competition go to www.enterpriseuk.org/enterprisingbritain.

Mr Prisk, who kicked off a two-day tour of Cornwall, said the additional £1.5 million grant from the RDA would allow wave energy company Ocean Power Technologies Ltd  (OPT) to develop a larger version of its ‘Powerbuoy’ wave energy device.

It follows an announcement by the Government-backed Technology Strategy Board last week of a £7 million investment in nine projects aimed at developing wave and tidal technologies of the future.

OPT is the first company signed up to use Wave Hub, which is a £42 million project to create the world’s largest test site for wave energy technology, off the north coast of Cornwall.

Wave Hub is being installed on the seabed over the course of the next few weeks and is a cornerstone of the UK’s ambition to grow a world-class marine energy industry.

Mr Prisk said: “This ground-breaking Wave Hub project is evidence of British engineering and offshore expertise – almost 80% of the value of contracts awarded so far have gone to UK businesses.

“The UK is already leading the way in marine energy, with 25% of the world’s wave and tidal technologies being developed here. This is a huge opportunity for UK business – the sector could be worth £2bn by 2050 and it has the potential to create up to 16,000 jobs by 2040.

 ”But this is a young industry and it needs support to realise that potential. That’s why Government is continuing to provide £18.5m of support for marine projects here in the South West. Today’s investment in OPT is further evidence of that commitment”                                                                                 

During his visit the Minister was briefed by the RDA on the progress of Wave Hub, and plans to invest £15 million – including £5 million from central Government – in major infrastructure improvements around Hayle Harbour, to support the development of a new marine energy business park, creating up to 200 jobs.

Stephen Peacock, Executive Director for Enterprise and Innovation at the South West RDA, who escorted the Minister on his visit to Wave Hub, said: “This was a great opportunity to brief the Minister on progress with Wave Hub, and for him to meet some of the many businesses and academics involved in developing a marine renewables industry here in the South West.”

OPT, based in Warwick, is developing a scaled-up 500kW version of its existing 150kW Powerbuoy wave energy device, which converts the power of the waves into electricity. It will be working with A&P Falmouth and the Peninsula Research Institute for Marine Renewable Energy – a collaboration between the Universities of Plymouth and Exeter – during the development phase. The company also hopes to deploy a 150kW version of Powerbuoy at Wave Hub.

Angus Norman, chief executive of OPT, said: “This award is a tremendous endorsement of OPT’s technology and more than  six year’s research and manufacturing investment by the company in the UK.  We share the Government and the RDA’s vision that the UK has a unique opportunity to leverage its geographic location and engineering expertise to harness wave power for abundant, safe and renewable energy as well as a source of new jobs and industrial regeneration. We also believe our next generation PB500 PowerBuoy will be competitive in larger production volumes with fossil fuel-based energy.

Mr Prisk’s two-day trip to Cornwall also includes visits to the Combined Universities in Cornwall campus at Tremough, the newly opened Pool Innovation Centre and marine engineering company Fugro Seacore in Falmouth.

 

 

The projects receiving the funding are:

• The Academy for Innovation and Research (AIR) is a research & development laboratory for the creative industries. It will provide a facilitation space to assist in the development of high growth, knowledge based businesses and raise levels of business innovation, competitiveness and productivity in Cornwall, focusing on sustainable design and digital media. This will allow UCF to support additional full-time students and is expected to create an additional 253 jobs. 

• The Exchange; an extension to the library, increased seminar and lecture space, new student services facilities and a reception. It will be used by both Exeter and UCF students.

• These additional facilities will form three new developments at the Tremough campus:

Ø      AIR;

Ø      The Environment and Sustainability Institute (ESI) – a UoE led research project, which will support 368 new jobs by 2015 and house over 350 undergraduate and postgraduate students

Ø      The Performance Centre – a UCF led project that will open in October 2010 and will accommodate space for an additional 600 students as a result of the merger and relocation of Dartington College of Arts.

Ahead of his two-day trip to Cornwall, which includes a visit to the campus, Mark Prisk said: “Tremough is an inspiring example of transformational investment in Cornwall. By focusing the research and development agenda on small business opportunities, which build on Cornwall’s natural strengths in the environmental and creative industries, the county’s HE sector is making an important contribution to the local economy.”

Suzanne Bond, Executive Director of the South West RDA, said: “This is exactly the type of investment the South West economy needs right now. It supports and expands a truly innovative project that will in the long run position Combined Universities in Cornwall at Tremough at the forefront of environmental and creative industries. AIR and the ‘Exchange’ projects have the potential to attract hundreds of highly skilled, highly paid jobs to the county.”

David Allen, Registrar and Deputy Chief Executive at the University of Exeter, said: “The investment by the RDA is very welcome and we would like to thank them for their support for the Campus. The Exchange will help us to improve the range and scale of our student support services. This is also good news for Cornwall because it will enable the Campus to have an even greater positive impact on the county’s economy.” 

Professor Anne Carlisle, Rector & Chief Executive of UCF, said: “This is quite simply fantastic news for HE and business in Cornwall. It will benefit students and academics and be a spring board for new businesses.”

Dr Sue Brownlow, Director of CUC, said: “This is a significant step in meeting CUC’s aims of stimulating economic activity and increasing innovation and enterprise, benefitting the whole of Cornwall.”

This funding commitment brings the total investment in CUC facilities across the county to just over £110m. The investment will add to the £6.98 million contribution already made by the South West RDA and the £5.06 million approved by the Higher Education Funding Council for England (HEFCE).  The investment needs to be completed by March 2011 and an application for ERDF is well advanced.

The Performance Centre and ESI alone have been approved for more than £35 million of ERDF (European Regional Development Fund) Convergence investment. This builds on previous European structural funding which was instrumental in the creation of the Combined Universities in Cornwall. ESF (European Social Fund) Convergence is being invested in training, skills and research and strengthening links between the CUC and Cornwall’s businesses.

Mr Prisk’s two-day trip to Cornwall also includes visits to the Wave Hub project at Hayle, the newly opened Pool Innovation Centre and marine engineering company Fugro Seacore in Falmouth.