Latest news and statistics: Tees Valley Economic Briefing

December 11th 2013

Summary:

November was a fairly quiet month for new job announcements in the Tees Valley with the news dominated by the announcement late in the month that npower was to restructure its North East operations and close its Thornaby Call Centre in June 2014.  On a more positive note there were new job announcements in the Manufacturing and Engineering sectors with Applied Graphene Materials looking to create 20 new jobs and Unit Birwelco creating 12 new jobs.

Following the pattern observed during the second half of 2013, Tees Valley private sector business confidence and activity continued to pick-up in November.  Employment levels are increasing but growth rates remain significantly below those observed across many other parts of the UK.  Business surveys, such as KPMG’s first North East Business Instinct Survey, are generally positive about future sales, business conditions and employment prospects through 2014.  However, on the downside there are indications that cost pressures are increasingly impacting negatively on profit margins, particularly across the service sector.

REPORTED JOBS GAINS AND LOSES

NPower closure dominates Job Gains & Losses -  November's figures have been dominated by the announced closure of Npower's Thornaby call centre, with the loss of over 500 local jobs. Otherwise, it was another relatively quiet month with more positve than negative stories. Note that only stories reported in the press are reported. These trends can be affected by significant individual announcements, and that nearby developments outside the Tees Valley are not included.

UNEMPLOYMENT

Fall in Unemployment Continues - The rate of Claimant Count unemployment in the Tees Valley continued to fall in October, having fallen each month since February. It also fell in the North East and GB.   Tees Valley unemployment is at its lowest rate since April 2009.

New Vacancies

As described in the May edition, we are publishing data on job positions added to the Universal Jobmatch system in each calendar month, per 1,000 residents aged 16-64, on an experimental basis.  After the sudden large surge in October, vacancy numbers have fallen back, though still well above previous months.  Historically, job vacancy figures have often been very volatile.

Long Term Unemployment

The graph is an update of one we recently included showing trends in claimant unemployment flows and long term unemployment, associated with the recent fall in unemployment.  The number of people stopping  claiming unemployment benefit  has continued to rise. This is now having a clear impact on long term unemployment, which has  begun to fall.  However, the number of new claimants, which fell distinctly in the Spring, has now begun to rise.

Engineering Energy and Offshore

The global engineering, construction, procurement and maintenance company, Unit Birwelco, is to open an office in Stockton-on-Tees in the New Year.  The firm will create around 12 new jobs taking the total staffing complement to 20 by mid-2014.  The new office will allow the firm to work more closely with its Tees Valley clients across the growing energy and process sectors.

200 construction jobs and up to 35 permanent positions could be on the way to Haverton Hill, Stockton.  Plans for a UK-first energy-from-waste gasifier are nearing their financial target, with work potentially able to commence by March 2014.  Haulage firm Scott Brothers, which owns the land, and Taunton company 02N (Old to New), which has worked on similar energy plants in the past, will work together with AECOM, the company that designed Britain’s tallest building, the Shard, designing, building and operating the plant.

Manufacturing

November saw Wilton based company Applied Graphene Materials (AGM) float on the London Stock Exchange.  The Durham University spin-out firm’s share price climbed sharply in its first few days of trading.  To support their drive to increase graphene production eight-fold over the next 18 months, the company plans to increase their workforce from 10 to more than 30.

Contact Centres
The energy giant npower has announced a major reorganisation of its North East operations and plans to close its Thornaby Call Centre in June next year.  Nationally, a total of 1,460 jobs will be lost including 430 across the North East.  The 500 workers at the Thornaby site have been told their jobs are safe, but must relocate to the firm’s head offices in Rainton, Sunderland.
  
Workers at a Middlesbrough call centre have been told their jobs are at risk.  Outsourcing company Firstsource have announced up to 80 job losses at its Fountain Court centre in the town.  420 employees at the site have been told that up to 20% of the workforce will be cut, and workers have been put on 45 days redundancy notice.  However the company has stated that it is confident that the final number of redundancies will be significantly lower than 80.

Finance

The Latvian firm 4finance Limited, trading as Vivus, is closing its Thornaby headquarters in December and moving to London.  More than 30 jobs are at risk but workers have been given the option of keeping their jobs if they move to London.  Earlier this year, the company had unveiled plans to employ 60 North East workers by the end of 2013 and expand that workforce to more than 100 staff next year.

Digital and Creative

SockMonkey Studios, the Middlesbrough-based software firm, has taken on two new employees.  The business was helped to start earlier this year after being accepted on to Teesside University's Digital Fellowship Programme and is now housed in its incubation centre.  The centre provides training, support, and advice to graduate start-up businesses.  Teesside University graduates, such as the founders of Jet Stone Studios – a developer of games for smartphones and tablets – have also set-up business under the programme.

Tees Valley web design agency Koodoo Creative is expanding with the launch of a spin-off mobile apps business.  The new online tool, Mobile Rockit, allows businesses to build apps and mobile versions of their websites quickly and cheaply.  Following its launch, the company has added an intern from Teesside University and a senior sales executive to its team. More new jobs are likely to be created in the coming months.

Retail
The end of the month saw the opening of a new store specialising in designer clothing, footwear and accessories in the Cornmill Shopping Centre, Darlington.  Scotts is relocating from Northgate in the town centre to accommodate expansion plans following a recent merger with local independent fashion retailer Berties.  The new store is expected to employ up to ten additional full and part-time staff taking employee numbers up to more than 15.

Five new firms have started trading in Stockton Town Centre’s Enterprise Arcade.  The five businesses are Wags and Whiskers, Poppy Rose, Tippytoes, Vintage Ice and Mini Munchkins.  The Enterprise Arcade offers new businesses a chance to test trade and develop their enterprises in a safe yet busy retail environment on the High Street.

November saw Barratts Shoes go into administration for the third time in four years.  Up to 20 jobs in the chain’s Middlesbrough and Redcar stores are at risk.

Apprenticeships and Training

The Redcar-based label manufacturing business, First Choice Labels, is continuing to recruit local job-seekers and apprentices.  The firm has recruited an apprentice printer and taken on an existing apprentice on a permanent basis after their successful completion of the company’s two-year NVQ level 2 apprenticeship.