Coming out of rural recession…

At the Forum’s meeting this week we heard about the impact of the recession in rural areas. One of the less dispiriting features of the recession has been the way that private sector jobs have – by and large – held up. There has been far less job-shedding in rural areas than in urban ones. This is thanks in part to the imaginative approach of employers and the flexibility of their workforces. Stimulus packages seem to have helped as well. Considering that the economy has been in recession for six quarters, many of us would have expected things to have got much worse than they have.

Some relatively rural parts of the region – such as the areas around Cannock and Lichfield and parts of north Warwickshire – have fared worse than other rural areas. Youth unemployment is a particular concern in the Cannock area and the Wyre Forest district of Worcestershire. Those without formal qualifications have also struggled to find work.

There is also a gender issue: a good many of the manufacturing and construction jobs lost in the first part of the recession were held by male workers. Since March 2009 there have been more jobs lost from the services and public sectors, in which jobs are much more likely to be held by women.

But are we out of the woods? Notified redundancies peaked in the region in December 2008, which suggests we are moving in the right direction. But in the Marches sub-region (the mainly rural west close to the border with Wales), the number of redundancies being notified fell until October 2009 and then started rising again.

Those parts of the region that are heavily reliant on public sector jobs are more vulnerable than most. The effects of the cuts are already being experienced by local authorities and other orgnisations, and we know there is more to come. The rural districts that rely heavily on the public sector for jobs include Stafford, Bromsgrove, Worcester and the county of Shropshire. In total, public sector bodies spend around four billion pounds in Shropshire every year; if the cuts amounted to a quarter, the mainly rural economy of the county would lose £1 billion a year. This is bound to affect the private sector, because some businesses will be trying to sell to individuals who have less money coming into their homes, and because a lot of businesses rely on public sector bodies for at least some of their contracts.

So does all this mean that we are heading for the feared ‘double-dip recession’? Kate Barker of Bank of England monetary policy committee fame says this is unlikely, though she does not rule out another quarter of negative growth. She thinks that the recovery will be fragile and bumpy.