Credit Crunch

Jul 1, 08 - 5:12 PM

New jobs...as Wales benefits from growth???

My first post, but I had to pass this on. The headline from walesonline.co.uk (Western Mail) must be the most ridiculus headline of all time:
"New jobs, and more likely, as Wales benefits from growth" (http://www.walesonline.co.uk/business-in-wales/business-news/2008/06/26/new-jobs-and-more-likely-as-wales-benefits-from-growth-91466-21151962/)...surely Sion Barry must be a paid up member of the Gordon Brown Appreciation Society? With over 500 jobs going Ventura.

On the same day Sion Barry wrote another article "Cardiff tops credit crunch impact table" (http://www.walesonline.co.uk/business-in-wales/business-news/2008/06/26/cardiff-tops-credit-crunch-impact-table-91466-21151795/), and he went onto say "Cardiff...has a relatively strong and growing financial services sector..."

Has anyone looked for a job in Cardiff? It's easier to find a bus travelling at less then 20 mph down St Mary Street. The financial services sector is all but nonexistent, Legal & General, Zurich...can you think of any other large financial services company in Cardiff? It's difficult...

Cambo_Dai

Jul 1st, 2008 - 6:06 PM

Re: New jobs...as Wales benefits from growth???

I'm sorry, but Cardiff has a very strong financial services sector: they make up about 20% of employment in the city versus 10% in Wales as a whole about about 16% in the UK. This sector also includes Insurance.

You also have Admiral Insurance - Wales only current FTSE 100 company. Then you have Aviva, Lloyds TSB, Natwest, HSBC, Barclays, Principality, ING Direct, Norwich Union, and then there are litterally thousands employed in smaller firms across the capital in areas from wealth management, to pensions planning, to mortgage advice, debt consultancy, general auditing and accoutancy etc. Financial services grew by 10% in Cardiff in 2006. And its likely to continue growing.

I haven't searched for a job in Cardiff recnetly but I cannot believe it is as difficult as you make out: if you are well qualified, have experience and show a drive, even in the current climate, jobs are available. Maybe your skills dont match those needed?

Cambo_Dai

Jul 1st, 2008 - 6:07 PM

Re: New jobs...as Wales benefits from growth???

And indeed, most estimates are for the economy to continue expanding, albeit at a rather tepid pace. This might feel like a recession after 16 years of continuous and pretty robust growth but it isnt on any standard definition.

Credit Crunch

Jul 8th, 2008 - 1:42 PM

Re: Re: New jobs...as Wales benefits from growth???

Sorry for the slow response. I would like to think that Cardiff is expanding in terms of the financial services sector, however when 70 jobs go at Zurich (http://www.walesonline.co.uk/news/cardiff-news/2008/07/04/zurich-axe-70-jobs-due-to-tough-market-91466-21264051/) and now a further 300 jobs may go at FirstPlus (http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL0852312120080708), one can only think that things really might turn out very nasty indeed. The Cardiff financial services sector is shrinking by the day...in a years time it could well be half the size that it is today.

Credit Crunch.

P. S. AVIVA own Norwich Union and I think they no longer trade in Cardiff anyway.

Credit Crunch

Jul 11th, 2008 - 6:17 PM

Re: Re: Re: New jobs...as Wales benefits from growth???

Oh yes, and 26 jobs going at the Principality Building Society (http://www.walesonline.co.uk/business-in-wales/business-news/2008/07/11/principality-announces-more-redundancies-91466-21327762/)...Le Crunch !!!

jantra

Jul 1st, 2008 - 6:21 PM

Re: New jobs...as Wales benefits from growth???

Cardiff's financial services sector is growing at a pretty healthy rate...i've read somewhere that it'll surpass Bristl within 20 years as the Waels/SouthWest's financial centre

Kyle

Jul 1st, 2008 - 6:25 PM

Re: New jobs...as Wales benefits from growth???

Well replied Cambo.

I'm not sure what job you are looking for, but HSBC and Admiral have just announced new jobs in Newport, hardly a million miles from Cardiff.

The total number of new jobs for both those companies is more than than non-finance related Ventura jobs that have been lost.

There are also plenty of jobs in other sectors as well...just look at the expansion in IT jobs in the last few years in the greater SE Wales area. Also, a number of government departments have relocated their backoffice functions to SE Wales. Not all of those jobs are low paid either.

As much as I'm very Cardiff centric, you have to look at SE Wales as a whole when looking for a job. Newport is growing and I can name 4 decent sized companies expanding in Cwmbran....particularly in the IT job market. Things could be a whole lot worse at the moment job market wise.

Hypercelt

Jul 1st, 2008 - 6:33 PM

Re: New jobs...as Wales benefits from growth???

I must admit to wondering what was going on when I kept reading stories of job creation in the last week. On the other hand Cardiff's own IQE has just landed a multi million dollar contract which will give it its highest ever income.....it takes me back to the mid 1990s when the fall in the pound led to very rapid growth in south wales in comparison to the rest of the UK.

Long may it continue - now if we can just persuade some Tesco-holics to buy their fresh meat and produce from Cardiff market then the Welsh economy will really begin to feel self sustaining and buoyant!

Cambo_Dai

Jul 1st, 2008 - 8:03 PM

Re: New jobs...as Wales benefits from growth???

Ahh... the old fallacy of "buying local". Buy local if you want to for 'ethical reasons', but don't do so under the impression that it creates net wealth or jobs locally. It tends not to as if this product is more expensive it just means less spending on other goods, and particularly services. And for every farmers market job gained you lose a hairdresser, cinema worker or whatever.

I notice the Golden is recruiting if that is up your street :p

James

Jul 1st, 2008 - 8:40 PM

Re: New jobs...as Wales benefits from growth???

I always buy Welsh cheese, milk, butter etc, and buy Welsh meat when I can. Where I can I'll buy something that is produced/packaged within Wales too..for example Welsh paned tea. I also buy lots from Cardiff market, because it's excellent value, vibrant etc.

I appreciate that if everyone spent a fortune on welsh lamb and cut back on haircut, shoes and house conversions then the economy could suffer, but it needn't be that way. In a great many cases welsh produce is very competitive on price, and I'm certain-in the examples I've given, that the economic, social, environmental reasons outweigh any potential negatives.

Buy local I say!

Jeremy

Jul 1st, 2008 - 8:43 PM

Re: New jobs...as Wales benefits from growth???

Do not buy your line Cambo Dai. If I spend say £1.60 on a bottle of Rhymmney Beer rather than £1.30 on some French Bottle I might have 30p less to spend in the local cinema. But after taking the shop profit out of the equation, say 80p and 65p respectively, then 80p stays in Wales and is spent on wages suppliers etc whereas the other 65p buggers off to France. No contest in my eyes.

In addition you can often get better prices in local butchers than in supermarkets and they support more local suppliers than a Tesco store.

Wales is good at producing meat, dairy and beer, why spend it on stuff that does not taste as good, uses more energy to transport and whips money away from us as a community.

London-David

Jul 2nd, 2008 - 12:02 AM

Re: New jobs...as Wales benefits from growth???

Jeremy: if only things were that simple and we could 'add up' incomes, expenditures and outputs in such an easy manner. Unfortunately, its not the case. If you were correct then nations wouldn't want to trade because of the 'leakage' of value-added to other countries. However, trade does occur, and does boost economies because it ensures that things are carried out in areas that have a comparative advantage in them. The UK had a comparative advantage in wool, then cotton, then iron and coal, then shipping, then perhaps chemicals and autos, and now services. We benefit by buying in our manufactured goods from overseas who can produce it relatively more efficiently. We can direct our resources to areas we are relatively more efficient in.

The real idea is not about demand then, but supply. Unless there are massive under-utilised resources in an economy, its best not to interfere with trade as it will encourage a shift of resouces from areas we are good at to those we are less good at. If on the other hand we have excess supply, you may want to shift demand towards home goods. However if it provokes a backlash overseas then we are going to be worse off.

James

Jul 2nd, 2008 - 12:37 AM

Re: New jobs...as Wales benefits from growth???

The argument may be valid when comparing UK goods with French goods, but most of my 'buy welsh' decisions mean i buy welsh cheese over scottish cheese, or welsh lamb over somerset lamb...surely here, no argument can be made?

Cambo_Dai

Jul 2nd, 2008 - 10:22 AM

Re: New jobs...as Wales benefits from growth???

The argument can be made at any level - right down to two individuals trading, or two villages trading. It has nothing to do with exchange rates, or borders, or whatever. Its basically a concept known as comparative advantage and states that trade is good even if I am more efficient in 'absolute' terms than everyone else (or vice versa) because there is always something, by definition, that I am 'relatively' mroe efficient at. E.g. I can produce 1 car or 2 bikes an hour, you can produce 2 cars and 3 bikes. Surely I'd be better off closing my borders as you'll take all my markets, no? Well no. Because I can 'transform' a car into two bikes, and you a car into 1.5 bikes, so it makes sense for me to produce bikes as it involves forgoing fewer cars.

The argument breaks down when we aren't fully employing our resources. Now, its obvious there is unemployment and economic inactivity in Wales. But the extent to which this can easily be brought "on stream" and used is debatable. We may have some easily accessable spare capacity but its probably not much. In this case new demand will just shift supply rather than create new supply.

Jeremy

Jul 2nd, 2008 - 8:38 PM

Re: New jobs...as Wales benefits from growth???

Cambo - comparative advantage in agricultural terms in Wales means that grass grows here in verdant amounts, which means we are good at producing meat and dairy products. You cannot do much else with the land so why not support an under utilised resource and by doing so help grow firms that can trade outside of Wales and help us earn a living that can then be traded for goods we cannot produce.

It is almost as if you have an aversion to buying anything from Wales. I do not see what your problem is with buying local where we can. It is not as if Wales will ever produce all the goods we consume and as you state our assets and people are underutilised.

Guiness in Ireland did not become a worldwide brand because the populace ignored it, they drank masses of the stuff which gave the company the ability to reach beyond Ireland. Now we don't need to grow a giant but if the product is good enough what is the problem with supporting it and helping them achieve the reach they need.

Personally I think economic models will have to be totally rethought as resources and especially oil get more expensive and the supply less reliable. eg notice what happened to the UK economy in the fuel blockade in 2000(?) when supermarkets started to run out of food.

Cambo_Dai

Jul 3rd, 2008 - 10:56 AM

Re: New jobs...as Wales benefits from growth???

I have nothing averse to buying local. The constraining factor is not land - we have masses of it. The constraining factor in most industries are skilled labour and the availability of capital. Wales does NOT have a comparative advantage in agriculture. We have a comparative advantage in some technical aspects of manufacturing and in many areas of services, particularly (and maybe unfortunately) some low-value added sectors such as call centres.

We have some underutilised labour and capital but like I said I dont think we have much - in particular, not much is likely to flow into agriculture. If there was a lot of spare capacity in agriculture don't you think they would have responded to record high prices and increased their output to take advantage? The fact that they haven't means that switching to local produce is likely to push up prices as there isn't much spare capacity in our agriculture sector.

With this in mind all I'm saying is if you want to buy local for ethical reasons or you want to help farmers in particular do so. But don't be guilted into thinking it will help the economy of Wales as a whole. Just as protectionism is a fallacy, so are "buy local" policies, in terms of overall economic output of an area.

James

Jul 3rd, 2008 - 2:37 PM

Re: New jobs...as Wales benefits from growth???

Dai, I respect that your saying, especially the macro economic benefits of trade etc.

However, I still can't see how if myself and others chose to stop buying Bobs butter from Blackpool for 50p and started buying Maggies Marge from Merthyr for the same price, that this could have anything but a positive impact for the welsh economy, especially if an increasing number of people do so.

It would ultimately lead to an increase in production, an increase in suppliers, an increase in revenue, an increase in employees, and ultimately an increase in profits.

I appreciate Bobs Butter has benefits for Wales also, in that it is transported here, the driver may stop off over night, fill his tank in Wales, and they may even source their material from welsh farms, but surely, the benefits of buying from a welsh based company are better where the two services are pretty much identical.

Cambo_Dai

Jul 3rd, 2008 - 4:39 PM

Re: New jobs...as Wales benefits from growth???

If prices are the same there is no problem - it indicates that you aren't switching from an efficient import to a costly home-produced product. If the local produce costs more and isn't of a better quality, however, there is no economic gain (and probably an economic loss as the production is less efficient at converting inputs (land, labour, capital) into output (butter)). You can of course buy local in any circumstance - the pleasure you get from doing so is economic output in its broadest sense. But don't feel pressured into doing so by the Tescopoly idiots who make out that supermarkets have been bad for the consumer and communities. They have driven down prices, made life more convenient and allowed families to spend money on other goods and services actually boosting local economies. It is true the likes of the local grocers suffers but its a boon for specialist shops, cafes, services as people have more money in their pockets.

I'm not against buying local. I'm against specious and unthought out arguments. The one that gets me is "supermarkets: the little shops will close. Noone wants tesco".. errr if noone wanted it they'd all still shop at the little shops. Its a patronising attitude that we all need protecting from our laziness to shop at tesco when what we "really want" is to trudge around all day between about 10 different shops. I'm not saying you're making such an argument: I just want to stop you in your tracks before you fall for their guff!

Karl

Jul 3rd, 2008 - 5:02 PM

Re: New jobs...as Wales benefits from growth???

I buy fruit and veg, meat and fish from stalls in town and the market. I do so for pure economic grounds - it works out substantially cheaper than doing it in the supermarket even factoring in 2 for 1 deals. I do it because I work in town so I can. The produce I buy, apart from meat, for the most part isn't locally produced but i do feel good/smug that I'm purchasing from an independent local trader rather than a huge conglomerate. I guess thats a by product of me saving money which no doubt you economists have a word for.

If it was substantially cheaper to shop at Tescos etc I would. I have no qualms about lining the pockets of huge conglomerates if in turn it helps line my pockets. The stuff that I do get from supermarkets - milk, bread etc - I make a conscious effort to buy Welsh. If my purchase of Braces bread helps support a local company and I am not compromising on quality or cost then I'm happy.

The fact of the matter is shopping at the supermarkets for certain items doesn't line my pockets and so if any of you work in town/live near town you may want to check out what the various independent stalls have to offer - I personally recommend the fruit stall behind M&S in Cathedral Walk and any one of the butchers on the back wall of the market.

Kyle

Jul 3rd, 2008 - 6:15 PM

Re: New jobs...as Wales benefits from growth???

Kind of returning to the original subject in this thread, Zurich have confirmed some job losses at their cardiff offices...not as many as it could have been, but dreadful for those affected obviously.

http://www.walesonline.co.uk/business-in-wales/business-news/2008/07/03/insurer-axes-70-jobs-in-cardiff-91466-21223251/

Overall, hopefully the finance industry in the city and surrounding area will ride out the storm and the people affected will be able to find jobs at places like Admiral and HSBC that are expanding.

Me

Jul 8th, 2008 - 2:09 PM

Re: New jobs...as Wales benefits from growth???

Credit Crunch's new post was stuck in the middle of the thread, and read:

"Sorry for the slow response. I would like to think that Cardiff is expanding in terms of the financial services sector, however when 70 jobs go at Zurich (http://www.walesonline.co.uk/news/cardiff-news/2008/07/04/zurich-axe-70-jobs-due-to-tough-market-91466-21264051/) and now a further 300 jobs may go at FirstPlus (http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSL0852312120080708), one can only think that things really might turn out very nasty indeed. The Cardiff financial services sector is shrinking by the day...in a years time it could well be half the size that it is today.

Credit Crunch.

P. S. AVIVA own Norwich Union and I think they no longer trade in Cardiff anyway. "

Cambo_Dai

Jul 8th, 2008 - 2:15 PM

Re: New jobs...as Wales benefits from growth???

I'm sorry - its not going to be 1/2 the size it is today. The "financial and business services employs some 20% of Cardiff's labour force - which is about 200,000 now, so thats maybe 40,000 jobs. 20,000 are not going to be lost - or should I say the chance of it being this severe is pretty pretty small. In the background many smaller firms are hiring and expanding, Admiral is still growing, etc etc. For all the doom and gloom of the labour market, the numbers in employment is still growing (albeit not at a pace to cope with the larger workforce).

Its this kind of imprecise pronouncements that I criticised when I argue that economists typically make better commentators: as a profession we tend to avoid wild claims and simplistic claims.

Wizard

Jul 8th, 2008 - 2:33 PM

Re: New jobs...as Wales benefits from growth???

A selection of today's top stories:

Recession is looming
http://news.bbc.co.uk/1/hi/business/7494508.stm

The stock market is tumbling
http://news.bbc.co.uk/1/hi/business/7494821.stm

Some of our banks are teetering on the brink http://news.bbc.co.uk/1/hi/business/7495042.stm

Our beloved housebuilders are up to their necks in it
http://news.bbc.co.uk/1/hi/business/7484689.stm
http://news.bbc.co.uk/1/hi/business/7494675.stm

In addition, oil is at an all time high, food prices are accelerating faster than ever, gas prices are set to soar and on top of all that, the summer weather has been amongst the shittiest on record.

We're obviously all going to hell in a handcart. Women,children and economists first!

Maybe the government should introduce a handcart fuel duty surcharge .....

Jantra

Jul 8th, 2008 - 3:11 PM

Re: New jobs...as Wales benefits from growth???

wizard, you're in a jovial mood today...you really are pulling them out of the bag...

Zach

Jul 8th, 2008 - 3:34 PM

Re: New jobs...as Wales benefits from growth???

Another 300 Jobs lost this morning in Cardiff's (thriving) financial sector.

http://news.bbc.co.uk/1/hi/wales/7495511.stm

This after the 170 at AB Automotive yesterday.

The UK economy is like a house of cards (and we don't even produce these any more)

Cambo_Dai

Jul 8th, 2008 - 3:44 PM

Re: New jobs...as Wales benefits from growth???

Arrrgh Don't get me started on the "services versus manufacturing" debate. Landowners of the mid 19th century said the same thing about manufacturing versus agriculture and how the shift to manufacturing was going to be disasterous from the economy because of the trade cycle, satiation of manufactured goods demands etc. It was wrong then and it was wrong now. There is nothing wrong with a service-dominated economy, it simply reflects our stage of development, and the mechanisation of manufacturing. Would you rather us make things by hand?

I'm not saying that the financials sector isnt going to suffer - UK wide as well as in Cardiff but that coming out with things like "half the jobs will go" is just a bit rash when there isn't a precent for such a loss of jobs; even in the Great Depression which was a far far nastier shock when not only were loans difficult to come by but they were RECALLED using obscure parts of contracts.

Zach

Jul 8th, 2008 - 3:58 PM

Re: New jobs...as Wales benefits from growth???

In the 19th Century the UK was, compared to the rest of the world an advanced economy, the seat of a vast empire with commodities pouring in to country.
Now we are a second rate indebted country that has built its reputation on the stability of its financial sector.
I'm afraid that's gone as well.

Half the the popilation ina county ca'nt reed or right correct like, they dont no there words from there numbers. 50% go to University and the other tree quarters work in call centers.

I'm sure China and India will over-take us in literacy levels very soon.

We are all doomed, doomed you here.

Jantra

Jul 8th, 2008 - 4:03 PM

Re: New jobs...as Wales benefits from growth???

on this point I'm with Dai

if the UK is service sector it is because its capital pool is better utilised in that sector. we cannot compee with manufacturing but thats because it is not as value added as financial services...we make money from services and then buy cheap manufactures from overseas just like we manufactured goods in the 19th century and imported agricultural produce from overseas....Britain is a tthe forefront of the world economy, maybe not in absolute terms, but in the way that value is added, most definitely.

James

Jul 8th, 2008 - 4:13 PM

Re: New jobs...as Wales benefits from growth???

I think we can be at danger of looking too deeply into headlines.

Firstly, there is no way of masking it; there has been some pretty stinging job cuts in cardiff recently.

600 at the call centre in Splott
170 at the car parts manufacturer yesterday
300 at First Plus.
Also, expect to hear soon that the International Bac are closing their Cardiff office with a further 300 loses.

However, these jobs rarely result in people ending up on the dole. Firstly, the redundancies are usually staggered-often over 2-3 years. Often they involve early retirement packages, substantial pay-offs, and involve finding roles for people within the company.

Yes, it's never good news, but it's not cause for incredible doom and gloom. It's not so long ago that Cardiff lost around 1000 steel jobs when ASW shut, but the city survives. People survive.

Regarding the media..it is understandable that one company cutting 300 jobs is bigger news than 10 companies creating 30, but this is often the case. i've lost count of the number of times I've read in the business section of the WM that such and such company are hiring 25, or 15, or 40 new staff.

Anyway, it's bad news, but we aren't alone. A report I saw recently predicted that other cities (Mancs, Brum, Bristol, Leeds)would be worse affected by the credit crunch than Cardiff.

Cambo_Dai

Jul 15th, 2008 - 11:26 AM

Re: New jobs...as Wales benefits from growth???

Interesting:

http://www.walesonline.co.uk/news/wales-news/2008/07/15/axed-staff-invited-to-job-fairs-91466-21341505/

Not great jobs but neither were most of those lost.

Jeremy

Jul 15th, 2008 - 10:35 PM

Re: New jobs...as Wales benefits from growth???

Your right about that Cambo but still far better than the per-internet age in 1985 when the Western Mail had one page of job adverts each Thursday. Biggest shock on moving to Guildford then was the local weekly had a supplement of about 20 broadsheet pages of jobs. The economic differences were stark then but we have not closed the gap much since then.