Uncertain future as the gloom gathers
It did not take long for the waves in the US money markets to wash over our own shores.
But what began as a ripple of unease over sub-prime mortgages in early 2007 soon became a tsunami which engulfed Northern Rock in September last year.
Since then panic has only grown, with Norwich Union announcing a cut of up to 1,800 jobs nationwide, Zurich culling 170 jobs from its headquarters in Fareham in July, and Halifax closing offices in Havant and Gosport as part of a wider drive to shut 53 across the south.
Yesterday Fareham's Solent Mortgage Services, which had employed 160 staff, was revealed to have gone into administration, putting its remaining 40 staff out of a job.
And last week, one year and a day after Northern Rock asked for an 'SOS loan' from Bank of England, the US bank Lehman Brothers collapsed, followed three days later by a merger of Lloyds TSB and HBOS – predicted to lead to more job losses.
But although the outlook is gloomy, with year-high dole figures in Portsmouth breaking through the 3,000 mark last month, a brace of optimistic reports show the city to be in a resilient stance.
In July, a report by accountants UHY Hacker Young showed the city's economy in the grip of a strong upward momentum, with Gross Value Added increasing by 73.2 per cent over the last decade, making it the 10th fastest-growing city in the UK.
A housing market report by King Sturge at the start of September showed property prices were expected to deflate by around seven per cent across the region in 2008, a more gentle decline than expected. This was followed by a Morley and Scott report which revealed 10 per cent growth in the real value of firms in the South East over the last year.
So is the UK heading into a recession? And how will Portsmouth fare?
Maureen Frost, chief executive, Portsmouth and South East Hampshire Chamber of Commerce:
'Based on conversations with our members, I don't think the local picture is as gloomy as we may think. The majority are seeing high levels of business, particularly in the business services sector. Whilst there is a degree of caution and holding back on investment, optimism that any downturn will be short-lived remains.
'We are not as yet technically in recession and need to be careful we don't talk ourselves into one.'
Alan Wood, general secretary, Union of Finance Staff, representing Zurich workers in Whiteley, Fareham: 'I think we're going to see a reduction of around 25 per cent in the workforce of the finance sector, through a combination of nationalisation and conglomeration.
'Lloyds TSB and HBOS have said there won't be major job losses, but if you have a Lloyds and a Halifax on the same street, why would you keep two branches so close together?'
Robert Gausden, lecturer in macroeconomics, University of Portsmouth: 'My own view is there will be at least two quarters of negative growth. But if you look at the biggest employers in the area, IBM, the university, the dockyard, you wouldn't pick any one of them as being more vulnerable. If there is a recession, Portsmouth would get its fair share of misery, but only its fair share.'
Samantha Fay, Southsea Town Centre Manager: 'Southsea saw a dramatic downturn in footfall back in January.
'For the past two years the footfall has grown at between five and eight per cent year on year, but growth took an abrupt turn after the new year period.
'In February and March, again footfall figures were down, whilst Cascades and Commercial Road were reporting an increase.
'It appears locals started searching out value for money, turning instead to Cascades and the city centre, where Matalan and Primark are seeing record visitor numbers.'
Malcolm Hyde, director of CBI South East: 'There's a difference between being in a recession and feeling like you're in a recession. I think we'll see recession on paper in the next couple of quarters, but it's more about optimism and pessimism.
'Purely for example, if the financial sector had been growing at around 10 per cent for the last couple of years, and then it slowed to two per cent, it still feels like a recession.'
Rhoda Joseph, manager, Cascades Shopping Centre, Portsmouth: 'Yes, is the short answer. We're in real danger of it (recession]. That's obvious from the high unemployment figures we've seen. The headline figures may not be vast, but the upward trend is strong.
'I think Portsmouth is well braced to handle it. In retail, I think the high and middle ends of the market, should be worried, but in our car parks we've seen an increase in visitors on last year.'
David Murray, MD of The Listening Company contact centre, Portsmouth: 'It's clear our economy and the global economy is suffering its worst period in years. Whether we are actually in or about to embark on a recession is debatable, based on which economist you listen to.
'What's clear, though, is there are huge opportunities to be had, and with every dark cloud a silver lining emerges.'
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Weather for Portsmouth
Sunday 12 February 2012
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