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The Recession

The Recession has been with us for some 10 months. It began with the sub prime mortgage crisis in the US, was accelerated by the credit crunch, and given an unhelpful twist by Mexican Swine Flu. Trade data continues to indicate weak and faltering First-World economies, with an overall decline in global trade of 9.5 percent this year. On a positive note, emerging and developing countries are expected to grow by 1.6 per cent this year, the leaders being China and India at 6.5 percent and 4.5 percent respectively.
In the First World, the US economy contracted sharply by 6.1 percent in the first quarter of 2009. It has now contracted for three consecutive quarters for the first time since 1974-1975.
European unemployment jumped to a 44 month high in March, the highest since 1945. The number of unemployed in the 16 country Euro Zone rose by 419 000 to 14.1 Million in February, an increase from 8.7 to 8.9 percent of the workforce. Economists expect unemployment to reach 10 percent by the end of 2009, and 11 percent in 2010.
In the UK, the picture is equally bleak. The National Statistics Office (“NSO”) announced that "The unemployment rate was 6.7 per cent for the three months to February 2009, up 0.6 over the previous quarter and up 1.5 over the year. The number of unemployed people increased by 177,000 over the quarter and by 486,000 over the year, to reach 2.10 million. The unemployment level and rate have not been higher since 1997”.
Regional analysis by the NSO shows that registered job seekers in the manufacturing heartland of the West Midlands are now 6.7 percent of the total workforce, up from 4.8 per cent in November 2008, with similar figures for the manufacturing regions of South Yorkshire and Greater Manchester. In the City of London, comparable figures show an increase from 1.4 to just under 2 percent.
No sector of the economy seems immune. The UK professional sector is bracing itself for cost-cutting and job shedding in advertising, accounting and information technology. The Times reports that “Thousands of jobs are expected to go at WPP, the advertising group, and Sage, the software company, as the recession spreads beyond the banking and manufacturing sectors and into the service industries.”
Employees at all levels in the UK are nervous and anxious. They are not certain that their jobs are secure and fearful for their prospects if they become unemployed. Financial worries are putting family life and relationships under severe strain. The Birmingham Post says “According to a recent survey one in four people say their relationship is under strain because of money problems. Relate, the UK’s largest provider of relationship support, has reported that it had a 59 per cent surge in the number of calls to its centres over the festive period”.
There is no consensus on when the recession will end and recovery starts. Recently, UK politicians described an early recovery, signalled by increased activity in the financial markets globally and by Government interventions releasing liquidity into financial services. Many observers in the UK and overseas view that as pre-election “blether economics”.
Equally, there are many views on indicators of recovery. Economists are looking for the return of long term investors to the bourses and increased manufacturing activity raising the prices of raw material resources such as platinum and manganese. For the man in the street, it is more likely to be house price stability and more job advertisements in the newspapers.

It's not all doom and gloom

Firstly, rather than completely cutting staff, companies are meeting their staff requirements by replacing permanent posts with contract and temporary jobs. They are increasingly using their own web sites and online job sites to ease recruitment costs.
Secondly, out-of-work professionals are using the opportunity diversify their skills. An US Bloomberg study has discovered that the main move is into consulting. Significant numbers have become teachers and lecturers or used their savings to begin start-up businesses. The picture is similar in the UK.
Finally, there are major opportunities to create new jobs in new sectors, for example Alternative Energy.
The UK government is committed to a legally binding target of sourcing 15 percent of energy from renewable sources by 2020. Just 700 people are currently employed in the sector and most of the parts for wind farms are manufactured overseas. This provides an opportunity to create up to 70,000 long-term engineering, manufacturing and service jobs building and operating wind farms. There is an added benefit in that the new manufacturing and service jobs will be located in the regions that most need them.
Other green initiatives provide opportunities. The recent UK budget announced a scrapping allowance when replacing an old car with a new more eco-friendly vehicle. This is an addition to the support being put in place for buying electric vehicles. Current projections put the market for electric cars alone in Britain in the thousands early in the next decade. Both incentives will generate new regional job opportunities in the upstream and downstream automotive sector.
National and local government is stepping in to sustain employment. A lifeline for jobs in the construction, engineering and manufacturing sectors can be found in Government sponsored big-ticket projects, for example the London Olympics.
In Glasgow the City Council has begun a small business pilot project to run until September. Eligible city-based small businesses which approach the council's business support unit for help will be offered a free business review by an independent business and financial planning expert. The review will assess whether the company has a viable future and put forward strategies that could boost its chances of survival.
In summary, while the recession is likely to be with us for some time, there are opportunities to weather the storm and indeed grow and prosper by being flexible in outlook and changing the way we work and what we work at. The workplace of the future is likely to be much different and much more exciting.