News

 

November, 2003

 

Economic optimism grows across range of business sectors

Profitability in the UK's manufacturing sector has risen to its highest level for almost four years, according to the Office for National Statistics. Coupled with increased productivity and a fall in the value of the pound, the news provides further evidence that the manufacturing sector has turned a corner, and raises hopes of a broad-based economic recovery. According to the ONS, the rate of return on capital for manufacturing companies was 9.2 per cent in the second quarter of the year, up from 8.3 per cent in the previous period. This was the first time since 1999 that profits had risen above 9 per cent, although the figure was still considerably down on the high of 17.9 per cent in 1997. Manufacturing has been the weakest-performing sector of the UK economy for most of the past decade, but companies are now beginning to take on new staff.

There was also positive news elsewhere. The rate of return for services companies was 13.3 per cent in the three months to June, up from 12.7 per cent. Turnover in the software consultancy and supply sector rose by 16.9 per cent to $13.3 billion.

Another survey, by the CBI and professional services firm PricewaterhouseCoopers, shows optimism returning to the financial services sector. With a rally in share prices since March and a general improvement in business conditions, confidence among companies in the sector rose in the third quarter of 2003 by more than at any time in the past four years. Forty-four per cent of companies around the country said they were more optimistic about the business situation in their sector than they were three months previously, compared with 7 per cent who said they were less confident, giving a positive balance of 37 per cent. In addition, more companies said they expected to increase recruitment over the next three months than planned to cut jobs, representing the first increase in employment in the sector for more than a year.

In another sign of economic strength, the UK's new car market appears to be heading for a second consecutive year of record sales. Figures from the Society of Motor Manufacturers and Traders showed the highest ever sales of new vehicles for the month of September, keeping the market on track to surpass last year's record total of 2.56 million units. Much of the activity is down to intensive promotional campaigns at the smaller and cheaper end of the market. Sales of commercial vehicles, seen as a more direct indicator of economic activity, were 276,184 in September, a year-on-year monthly increase of 14 per cent, and 13.7 per cent for the whole-year total.

 

Employment is on the rise - but so are working hours

Increased economic optimism is translating into a more buoyant jobs market. A survey by the Recruitment and Employment Federation, which represents 8,000 recruitment consultants and 6,000 agencies, shows recruitment rising at the fastest rate for two and a half years, with strong growth in both permanent and temporary staff placements. Tough business conditions have not led to any significant increase in unemployment rates in the UK, unlike in the US, where the jobless total has risen from 4 per cent to 6 per cent in the past two years. Rather than laying off staff, UK companies have cut hours, introduced pay rises pegged to the rate of inflation and hired more temporary workers. Continuing weakness in private sector recruitment has been offset by a rise in new jobs in the public sector, which accounted for 181,000 of the 203,000 new jobs created overall in the year to June, but confidence now seems to be rising also in the private sector.

Figures from the Office for National Statistics (ONS) show that the number of people unemployed and claiming benefit is at its lowest level for 28 years. There was a slight fall in overall employment levels in August, down by 9,000 to 27.904 million. Unemployment as defined by the internationally agreed measure of the International Labour Organisation, which includes all those seeking work but unable to find it, rose by 5,000 to 1.479 million, or 5 per cent of the workforce, though the unemployment claimant count fell by 1,900 to 929,800. Earnings in the three months to August were up 3.4 per cent year-on-year, compared with 3.3 per cent the previous month.

Certain sectors of the workforce can expect improvements in the amount they earn. Women have seen a sharp rise in earnings, with the average salary of full-time female workers exceeding $32,000 for the first time. The government has been keen to promote equal pay between men and women, and has launched initiatives such as improving access to childcare, promoting flexible working arrangements and increasing women's participation in the workplace. By law, men and women who do work of equal value must be paid the same amount by their employer.

According to the ONS, the average rate of pay for full-time female workers was $32,502 in the year to April 2003, or $16.90 an hour. This was still only 82 per cent of the average male wage, which stands at $44,904, but the proportion was up from 80 per cent in April 1998. The pay gap between men and women is widest in London and narrowest in Wales, but it is particularly acute for part-time workers, with women earning only 60 per cent of the hourly average rate of men.

The National Minimum Wage rose on 1 October, taking the minimum rate of pay for adult workers to $7.20 an hour and the youth rate, for 18 to 21-year-olds, to just over $6.00 an hour. The increase in the adult rate is expected to benefit between 1.3 and 1.6 million low-paid workers, and at 7.1 per cent is double the rate of average earnings growth and around three times the rate of inflation. There will be further increases in the minimum wage in October 2004, when the adult rate will rise to $7.75 an hour and the youth rate to $6.56. The Low Pay Commission is also looking at the possible benefits of a minimum wage rate for 16 to 17-year-olds, taking into account education and training policy and existing support systems for young people. The minimum wage was first introduced in April 1999, since when it has risen gradually year by year.

It seems that increases in pay, however, may be offset by an increase in working hours. A survey by the Chartered Institute of Personnel and Development shows that the average working week in the UK is now 39.6 hours and that a quarter of British employees work more than 48 hours a week, compared with just 10 per cent five years ago. The average working week for men is 44.8 hours, while women have seen their worktime expand by half a day a week, to 33.9 hours on average. Although 25 per cent of employees have cut back their hours because of childcare commitments, another quarter say that long working hours cause them stress or depression and put pressure on family relationships. Employers are still able to opt out of the EU working time directive that restricts the working week to 48 hours, and the report concludes that the government's work-life balance campaign is having little tangible effect.

 

DTI focuses on raising productivity levels

Productivity grew by 1.8 per cent year-on-year in the second quarter of 2003, according to the ONS, a little below the UK’s long-term historical rate. In a bid to boost productivity levels, the DTI has launched a new strategy focusing on five key areas: transferring knowledge from the UK’s scientific research base and between businesses; maximising potential in the workplace; extending competitive markets; strengthening regional economies; and forging closer partnerships with key economic players, both in the UK and overseas. Measures include an increase in science funding to $4.8 billion per year by 2006; implementation of the DTI’s business-focused Technology Strategy and its Skills Strategy for employees; and the promotion of diversity, flexible working and partnership with unions in the workplace.

On some measures, productivity in the UK would appear to lag behind that of its international competitors. Official figures show that output per worker in the other G7 countries (the US, Canada, France, Germany, Italy and Japan) in 2002 was on average 16.5 per cent higher than in the UK, up from 15.8 per cent in 2001. The US in particular was well ahead, with productivity per worker increasing from 28.9 per cent more in 2001 to 30.8 per cent more in 2002. However, a new study by productivity specialist Proudfoot Consulting shows that, while no country is realising its full potential, performance in the UK is broadly on a par with the rest of the industrialised world.

The Proudfoot survey measures the productive capacity of plants by calculating the proportion of working time productively used. UK firms are currently achieving 60 per cent of maximum productivity, the same as in France, while the US and Germany both manage 63 per cent. One reason for the difference in interpretation is that the Proudfoot data are based mainly on large-scale industrial and service-sector operations and exclude small-scale service-sector firms and the public sector. The performance of the UK’s manufacturing sector, for instance, is better than that of the economy as a whole, with productivity rising at a rate of 5.9 per cent a year.

The most efficient sector on a global basis was telecommunications, which achieved 72 per cent of maximum productivity, followed by the automotive industry on 68 per cent, travel and transport on 66 per cent, engineering on 63 per cent and electronics on 61 per cent. At the bottom of the scale were textiles, healthcare, and banking and finance, which all scored 58 per cent, and manufacturing and food and drink, both on 57 per cent. In a simultaneous survey of 400 chief executives, Proudfoot found that managers were generally optimistic about productivity growth in the future, but that few – in the UK or elsewhere – were taking positive steps to make it happen. Most were too preoccupied with day-to-day concerns to make strategic, organisational changes.

In North West England, Lancashire West Partnership (LWP) has launched a new Productivity Centre to help local manufacturing and service businesses, supported by funds of $1.6 million from the North West Development Agency (NWDA). The centre provides a range of services, including on-site productivity reviews that identify potential improvements to a company’s operation, backed up by a practical action plan and ongoing support.

 

R&D and IPR boosts for small businesses

In a move aimed at helping innovative small businesses, the government has lowered the threshold at which small and medium-sized enterprises (SMEs) qualify for tax credits on their research and development investment, from $40,000 per annum to $16,000. Chancellor Gordon Brown introduced the scheme last year, allowing SMEs to claim an additional 50 per cent in tax credits on money invested in R&D, giving them a total tax break of 150 per cent. According to the Department of Trade and Industry (DTI), UK companies are spending more on R&D, with the amount invested rising from 1.8 per cent as a proportion of total sales value in 1998 to 2.2 per cent in 2002. However, they still lag behind firms in the US, which devote an average of 4.3 per cent of their budget to research projects.

Another boost for SMEs comes with the abolition the $2,240 registration fee charged by the Customs and Excise authorities for the protection of intellectual property rights (IPR), 10 months ahead of schedule. Companies can now register their products free of charge, protecting their trademarks at importation from counterfeiting and other illegal uses. The move is part of a package of measures by the Customs and Excise and the DTI to deal with counterfeiting and protect the IPR of businesses in the UK.

A Dutch grants consultancy company, PNO, has set up a joint venture with UK firm j4b, based in Wilmslow, Cheshire, North West England, to provide UK firms with advice on applying for grants to help their businesses grow. There are large amounts of grant funding available from both European and international institutions, but many companies are unaware of them, and the application process can be tortuous. PNO aims to take the pain out of the process, operating on a ‘no win, no fee’ basis, with the fee being around 10-15 per cent of the grant. Its client list in the Netherlands includes an impressive array of multinationals, including Cap Gemini, Kvaerner, Unilever, Mercedes-Benz, Nike, Philips and Vodafone.


London best for business – for fourteenth consecutive year

London has been voted Europe’s best city for business in Cushman & Wakefield Healey & Baker’s European Cities Monitor 2003 survey – the fourteenth year in a row it has taken the top slot. The survey, which included 30 key European cities, including Paris, Brussels, Frankfurt, Amsterdam and Barcelona, saw London take first place in five key criteria used by European companies when deciding where to locate. These were easy access to markets; quality of telecommunications; external transport links; availability of qualified staff; and languages spoken. The single most important factor for the 501 European companies surveyed was access to markets, followed by communications.

London maintained its lead over Frankfurt as the perceived financial capital of Europe and remained the focus of expansion plans for a high proportion of companies. In 2002, foreign direct investment in the UK capital increased by a third, and London accounted for 7 per cent of all investment projects in Europe, double the share of its nearest competitors, Paris and Barcelona.

Demonstrating the city’s lead as a cultural as well as a business centre, the Stirling Architecture prize for 2003 has been awarded to the new Laban dance centre in Deptford, south east London. The prestigious $32,000 prize goes to the building judged to have made the greatest contribution to British architecture over the previous year. The Laban centre, which opened in February 2003, was designed by architects Herzog & de Meuron, who were also responsible for transforming a disused power station on the south bank of the Thames into the hugely popular Tate Modern art gallery.

Laban dance centre, Deptford, south east London

In late September, the capital staged the London Design Festival, a week-long celebration of the creative industries – from furniture to film effects – that is scheduled to become an annual fixture. For the inaugural festival, more than 65 different events were staged across the capital, with the support of 30 organisations.

 

Work of UK scientists recognised with Nobel Prize honour

Two UK scientists have been honoured with a share in this year’s Nobel Prizes, for medicine and physics. Professor Peter Mansfield, of Nottingham University, has jointly won the Nobel Prize for Medicine with Professor Paul Lauterbur of the US for his work on magnetic resonance imaging (MRI). MRI is a powerful diagnostic tool that allows doctors to obtain three-dimensional images of organs inside the human body; it has helped to replace invasive examinations and reduce risk and discomfort for millions of people undergoing medical tests. It is especially valuable in providing detailed images of the brain and spinal cord and in the diagnosis and treatment of cancer.

Professor Mansfield was instrumental in developing MRI technology, creating a mathematical method for translating the signals coming from the scanner – based on the water content of the scanned tissue – into 3D images of the interior of the body. The first MRI scans were introduced in the 1980s; today there are 22,000 MRI scanners at work across the world, performing 60 million examinations every year. This is the third year in a row that a Briton has won the Nobel Prize for Medicine.

Professor Anthony Leggett, born and educated in the UK, has won a third share of the Nobel Prize for Physics for his pioneering contributions to the theory of superconductors and superfluids. Professor Leggett, who works at the University of Illinois and is now a US citizen, shares the prize with two Russians, Alexei Abrikosov and Vitaly Ginzburg. Superconductivity allows certain metals, alloys and ceramic compounds to conduct electricity without resistance; materials of this kind are used in particle accelerators and (coincidentally) in MRI scanners. Superfluids operate at very low temperatures and display no viscosity; they are used to study the fundamentals of matter.


Science parks link up in international collaboration

In another example of Anglo-Russian cooperation, Cambridge Science Park, in Eastern England, is set to create a formal alliance with Moscow State University (MSU). MSU, which initiated the move, has its own well-established science park with 40 tenant companies, employing around 2,500 workers. Around 40 per cent of them are involved in IT and software, while others are working in the fields of biotechnology, telecoms and new materials. Delegates from MSU visited Cambridge in September, and concluded that synergy between the two science parks created significant potential for trade between the regions.

In North Staffordshire in the West Midlands, work has started on the second phase of development at Keele University Science Park. Two new high-spec innovation centres are to be built at a cost of $20.3 million, creating 64,000 sq ft of laboratory, office and incubator space for medical technology companies. They will help to underpin a medical cluster emerging at the site, and are expected to create and safeguard up to 200 jobs. In Yorkshire in northern England, a consortium of universities has beaten off competition from Oxford and London to run a new centre that will lead the government’s efforts to boost science teaching in schools. The centre, based in the city of York, will be financed by the Wellcome Trust, which will contribute $40 million in its first ten years.

Dundee in Scotland – which bills itself as the ‘City of Discovery’ – has been chosen as the site for a new life sciences Intermediary Technology Institute (ITI). The ITI, part of a national scheme to foster innovation in the life sciences, will be headed by entrepreneur John Chiplin, creator of GeneFormatics, who is relocating from California. Dundee is home to the UK’s largest cluster of biomedical businesses outside Oxford and Cambridge, with more than 2,200 employees in the sector. Its Technopole business centre hosts a number of biotech companies, including some of the 20 spin-outs from Dundee University’s research programmes, and has recently launched a new phase of development.

On 19 March 2004, the city will host the BioDundee Annual Conference, which this year has the theme Making Discovery a Reality (The International Perspective) and will feature speakers from the US, Europe and China. Dundee also has plans for a $32 million digital media park on a site close to both Dundee and Abertay universities. The ten-year project has the potential to create up to 1,000 jobs.

Northern Ireland has flagged biotechnology as a priority sector for development and has set up a new umbrella organisation, Bio Northern Ireland, to promote it. Backed by RDA Invest NI, the initiative was launched at a two-day biotechnology and life sciences exhibition and conference held in Belfast in mid-September. The province has a strong research track record in fields such as engineering, telecommunications and software, and this expertise will be used to promote it as an investment destination. Invest NI, which hopes to foster entrepreneurship in the sector, is helping to set up new centres of excellence, including the Centre for Genomic and Molecular Biodiversity at the University of Ulster and the Centre for Proteomics at Randox Laboratories, with the support of European Union funding.

In a separate development, Queen’s University in Belfast has won new research investment of $56 million, to be ploughed into the four fields of cancer research, chemical catalysis, climate change and the development of the next generation of microcomputers. The award, made under the second round of the Support Programme for University Research (SPUR 2), is a public-private initiative that is funded half by the UK government and half by Atlantic Philanthropies, a US organisation that supports regional development worldwide. The largest ever SPUR allocation of $25.3 million will go towards a $32 million Centre for Cancer Research, to be located at the university’s Lisburn Road campus.


Regional initiatives focus on building business

A number of new regional initiatives have been announced, aimed at boosting business activity in specific sectors of the economy. In the East of England a new venture capital fund has been launched to help SMEs operating in the six counties of the region. The CREATE East of England fund will provide growing SMEs with initial venture capital investment of up to $400 million, with a follow-on investment up to the same limit potentially available. Investors in the fund, which has reached a value of $32 million, include the DTI, the European Investment Fund, the Bank of Scotland and private sources.

In Yorkshire and Humber, a 6,450 sq ft design incubator is to be established for start-up textile and fashion design businesses. Based at the Textile Centre of Excellence in Huddersfield and due to go into operation early in 2004, the incubator is planned to create 36 new fast-growth businesses and 60 new jobs in its first three years. It will operate on a ‘Fame Academy’ basis: leading manufacturers will select the 12 most promising business propositions from the more than 1,000 textiles and fashion graduates turned out by the region annually. They will then provide mentoring support and guidance as the businesses get off the ground.

In the North East, a new industry alliance has been formed to boost the pharmaceutical, specialty chemicals and bio industries. The Pharmaceutical and Specialty Chemical Cluster (or P&S Cluster) will represent more than 150 companies, both large and small, at the regional, national and international levels. It will help to improve access to research by building knowledge- and cost-sharing networks and will promote the region as a destination for inward investment. The pharmaceutical and bio sector in the North East currently contributes around $7.2 billion annually to national GDP.

In the North West, Lancaster University Management School is to set up a new Leadership Centre, with $15.2 million of funding from Lancaster University and NWDA. The centre is planned to assist more than 10,000 SMEs over the next ten years and will enhance the Management School’s status as a leader among UK business schools. As well as working with companies across the region, it will focus on specific issues such as ethnic minority businesses, the needs of women and rural businesses. It will also provide additional research and teaching facilities for 385 postgraduates.

As well as its new Productivity Centre, the Lancashire West Partnership is also working with sister organisation East Lancashire Partnership to encourage the roll-out and use of broadband communications infrastructure throughout the region. With funding of $160 million from the NWDA, a new body, the Lancashire Digital Development Agency, has been set up. The agency has established five thematic working groups, for business, e-government, communities, learning and infrastructure.

The NWDA has also provided funding to the Logistics College North West (LCNW), a partnership between the Transport and General Workers’ Union and six local further education colleges. The LCNW, the largest Centre of Vocational Excellence (CoVE) in the UK, is an industry-guided initiative that aims to provide education and training programmes for people working in the logistics sector. The logistics sector employs 141,000 people in the North West and accounts for 8 per cent of the region’s economic output.


Authorities collaborate to build international transport links

Ports and regional authorities in the UK, France and Belgium have joined forces in an international initiative aimed at preparing the way for new freight transport services. Funded by the European Regional Development Fund, the FINESSE (Freight Intermodality and Exchange on Seas and Straits in Europe) project will carry out a far-reaching feasibility study for sustainable intermodal transport links based on rail and ferry services either side of the Dover Straits. The project is being led by the South East England Development Agency (SEEDA) and involves the ports of Dover, Calais, Dunkirk, Boulogne and Zeebrugge as well as Dover District Council and the regional authorities of Kent in the UK, Nord Pas de Calais in France and West Flanders in Belgium. The project will be carried out in five phases from September 2003 to December 2005.

Manufacturers and distributors in Telford in the West Midlands are set to get their own dedicated railfreight terminal, subject to planning approvals. The project will involve the reinstatement of a line that ran from Wellington to Donnington, and will be operated in conjunction with the Ministry of Defence, which has a major facility there. The terminal is expected to handle some 250,000 tonnes of freight a year, with the potential to expand to 750,000 tonnes a year.

The Port of Felixstowe in Suffolk, the UK’s largest container port, has officially opened the first-phase expansion of its Trinity Terminal, increasing its storage capacity by 6,500 teu. It is expected that a further section of storage area will be opened early next year, and that the quay will be fully operational by July 2004. When complete, the Trinity Terminal will provide 886ft of deepwater quay, dredged to a depth of 50ft, and will be able to handle the latest generation of container ships. The additional quay will expand the terminal’s deepwater berths to 1,440ft in length.


Honda eyes Swindon as base for new diesel vehicles

Honda’s plant in Swindon, South West England is reported to be the favourite among European sites to produce the company’s first own-design diesel engines. Diesel engines are already being installed in Accord saloons and estate cars at Honda’s Takanazawa site in Japan, but the plant only has capacity for 30,000 units a year and the company estimates it will need some six to eight times that capacity as European sales expand and diesel engines are extended across the model range.

Whichever plant is chosen, it will have to produce more than 100,000 units a year as Honda mounts an assault on the booming European market. Sales of diesels have expanded dramatically, from around 500,000 units a couple of years ago to 1.2 million in 2003. Insiders predict that within a few years more than half of Europe’s 14 million car sales a year will be diesels. Swindon is well placed as it already has capacity to produce petrol engines, and builds the Accord, the Civic hatchback and the CR-V sports utility vehicle, all of which are planned to use the new diesel engines. Honda sold 104,338 cars in Europe in the first six months of this year, up 13.2 per cent in a market that was down 2.6 per cent as a whole. The new petrol Accord was launched earlier in the years and sold 15,000 units in its first few months.

Meanwhile, Takao Europe Manufacturing Co Ltd, a Japanese car parts manufacturer which supplies both Honda and Toyota, is building a third extension to its factory at Gloucestershire Business Park, in South West England, to deal with rising demand for its products. The company established its first UK plant on the site in 1997, and has expanded significantly since then. The latest extension will add 27,750 sq ft to the existing 200,000 sq ft factory, bringing the company’s total investment to $80 million. Employing 375 people, the plant produces steel frames and structural components, with the help of 100 welding robots and a range of innovative technologies that make its press division one of the most productive in the world.


West Midlands unveils e-business initiative

RDA Advantage West Midlands has announced a $38.4 million initiative aimed at creating almost 1,000 jobs by boosting e-business across the region. The initiative – the Regional E-Business Development Initiative, or REDI – will safeguard another 1,800 jobs by supporting and developing the sector, and is expected to generate millions of pounds’ worth of extra sales by 2007. The project aims to raise awareness among businesses, especially small and medium-sized enterprises (SMEs), about the benefits of e-business. It will facilitate training and establish, in association with the West Midlands IT Association, a group of trusted IT suppliers that can provide advice and support to SMEs. Advantage West Midlands’ target is that all businesses in the region have access to broadband internet services by the end of 2004.

The REDI was unveiled at the agency’s first annual conference, an event held in Telford in late September which attracted 700 delegates. In all, some $1.6 billion in investment has been promised over the next three years to boost business and regenerate communities in the region, putting it on track to fulfil its ambition of becoming a world-class region by 2010. Among the projects in which Advantage West Midlands is involved are a $5.6 million virtual reality project at Birmingham University, designed to help the manufacturing sector; a new campus accommodating 3,000 students at University College, Worcester; two major schemes aimed at boosting skills level and recruitment in the construction industry; and an $8 million project that will transform the towns of Stoke-on-Trent and Newcastle-under-Lyme by restoring 11 miles of canals.

The region is also set to create up to 200 jobs over the next three years through a pioneering industrial waste reclamation project. The National Industrial Symbiosis Programme (NISP) brings together companies that produce waste and those that can use waste as the raw material for new products, creating new business and reducing the amount of waste dumped in landfill sites. Examples of NISP projects that are already successfully operating in the region include a firm in Oldbury that converts waste vegetable oil from fish and chip shops into bio-diesel fuel for cars; another Oldbury company that reprocesses old vehicle tyres into fuel for cement-making kilns; and a Coventry company that converts empty plastic chemicals drums into fenceposts and guttering. Advantage West Midlands, which is part-funding the programme, expects it to create 16 new business start-ups, some of them community enterprises, and to reduce the 16 million tonnes of waste generated in the region each year.

In October, Advantage West Midlands hosted a conference in Birmingham that highlighted the role of motor sports innovations in developing greener, more energy-efficient passenger cars. The conference, organised by the Motorsport Industry Association, was attended by around 150 delegates.
 

New property rules aim to simplify conveyancing

A new property law that obliges owners and occupiers to disclose details of leases and freeholds came into effect on 13 October. The Land Registration Act 2002 requires information to be logged with the Land Registry for all owned property and all leases over seven years. This information will then be made available to the public, unless the owner or leaseholder convinces the Land Registry that it is commercially sensitive or private. The intention of the act is to create a computerised system that will contain details of all ownerships and leases, making conveyancing simpler and more transparent.

Within the property sector, development continues on a wide range of new projects. Infrastructure work is about to begin at Kent Thameside in the South East, part of the government’s massive Thames Gateway regeneration project. Planning permission has been granted for a 250-acre site at Dartford Park, which will include 800,000 sq ft of offices, a 400,000 sq ft R&D campus and 700,000 sq ft of distribution space, along with 151 acres of residential development. The first phase includes a 32,000 sq ft innovation centre offering space for high-tech and start-up companies, which should be completed by summer 2005. A Fastrack transport system, using guided buses, will connect the various developments in the area, linking Dartford with Gravesend and Ebbsfleet, where the planned Channel Tunnel Rail link station will provide a commercial focus for the area, including 10 million sq ft of offices. The first phase will be built around to coincide with the station’s opening in 2006.

In London itself, the London Exchange is marketing the freehold of its former headquarters, the 1.4-acre Exchange Tower site on Old Broad Street, EC2 in the City. The site is due for redevelopment by architects Nicholas Grimshaw & Partners, which will increase its internal floor area by almost 80 per cent to 500,000 sq ft. The new complex will have 442,000 sq ft of offices in three buildings, including a fully reclad 28-storey tower, as well as 40,000 sq ft of shops. The price is expected to be in the region of $96 to $120 million.

In Yorkshire and Humber, a 3 million sq ft mixed industrial and office scheme is being planned for the last of four strategic development sites being promoted by RDA Yorkshire Forward. The 190-acre Gateway Goole site forms part of the Humber trade zone, and will make up the remainder of the 297-acre Goole Business Park. The site is located at junction 36 of the M62 and also includes a rail hub.

In the North East, work has begun on a new office centre aimed at small businesses from around the world seeking to establish a base in the region. The 22,500 sq ft Gateshead International Business Centre (GIBC) is being set up following the success of an initial scheme offering a package of business and living accommodation and support that attracted 34 businesses over the past three years. Located near the centre of Gateshead, it will comprise 51 offices, with meeting rooms, a reception area, utility rooms and informal meeting places with high-tech ICT facilities. It will also feature a number of environmentally friendly energy-saving technologies.

Elsewhere in the region, work is set to begin in mid-November on the first phase of the Morton Palms office and leisure development in Darlington. The development will include two grade-A four-storey office buildings with over 70,000 sq ft of space to let. The 28-acre site is well placed for road and rail connections, and is also close to Teesside International Airport.

 

Yorkshire and Humber rides out investment downturn

New figures from RDA Yorkshire Forward show that the Yorkshire and Humber region is faring relatively well despite the global economic downturn. Although inward investment fell across the UK, and by two-thirds within Yorkshire and Humber itself in 2001-02, the region remained one of the most popular destinations for inward investment, ranking third out of the 11 English regions. In recent months, Yorkshire Forward has held a number of Enterprise Shows across the region, resulting in nearly 50 new business start-ups. For the future, it predicts strong growth in five key clusters: advanced engineering and metals, chemicals, biosciences, digital industries and food and drink. Between them, these industries contribute $16 billion annually to the region’s economy of $104 billion; this figure is expected to grow by 20 per cent over the next decade.

Yorkshire Forward is also behind a new website aimed at helping businesses in the region boost their competitiveness. In a $4.8 million initiative, it has set up a site – www.knowledge-rich.com, or Regional Innovation Clearing House – that taps into research done at the region’s universities to track and predict industry trends in science, technology and innovation. The site uses advanced document summary software to provide information in an easily digestible format, and also contains customised information on specific issues, suggestions on unexploited ideas and licensing opportunities, and practical guidance on improving business competitiveness and profitability. Around 200 companies are already trialling the free service.

Meanwhile the city of Hull, in Yorkshire and Humber, has launched a marketing drive to promote itself as a destination for both UK and overseas investment. Urban regeneration company Hull Cityimage has launched a new website – at www.thinkhull.co.uk - that sets out the port city’s attractions. Hull is investing $1.6 billion in a regeneration programme that it hopes will put it among the UK’s ten top cities. Major projects under way or recently completed include the $256 million Ferensway development, the second largest urban regeneration scheme in the UK, and The Deep, a $73 million marine research centre and visitor attraction.

Around the regions

On 27 October the government inward investment bodies Invest.UK and Trade Partners UK merged under the single name UK Trade & Investment. The link-up is intended to reflect the closer relationship of trade and investment work and to provide companies around the world with an integrated service. Meanwhile, the East Midlands Development Agency (emda) plans to officially open its new office in Washington on 13 November.

Schneider Electric of France has expanded its business in Telford, West Midlands, adding a 107,500 sq ft extension to its existing premises and almost doubling its workforce to 520. Lifeboat Financial Services, which began as a 16-person start-up in 2000 and now employs 50 people, has taken 18,000 sq ft of space at the town’s Euston Park. Road access to Telford will be greatly improved when the M6 toll road opens in January 2004; there are also plans for a dedicated railfreight terminal to serve manufactures and distributors in the town (see above).

MIDAS (Manchester Investment and Development Agency Service) has joined forces with the Technology Association of Georgia (TAG) in a twinning scheme designed to open the door to the US market for high-technology firms based in the Manchester area of North West England. The scheme, part of MIDAS’s International Links programme, will give companies access to a network of business contacts who can advise on everything from market intelligence and licensing through to technology transfer and finding business partners. Georgia is one of the top technology regions in the US, and has created more than 600,000 new jobs in the sector over the past decade. MIDAS has already formed similar links with Atlanta, Melbourne, Pittsburgh, Minnesota and Tucson.

Enterprise software developer AppIQ, based in Burlington, Massachusetts, has opened an office in Manchester, North West England. The company is an established provider of data storage management solutions and will offer its AppIQ StorageAuthority suite throughout Africa, the Middle East and Europe region through specialist systems integrators and resellers. It has already signed a value-added reseller (VAR) agreement with UK company Source Consulting, based in Weybridge, Surrey in South East England.

Canusa-CPS, a subsidiary of Canadian company ShawCor, has chosen Crawley in Surrey, South East England as the base for its new headquarters for international sales for the EMEA region. The company specialises in protection systems for the welded joints of oil, gas and water pipelines – overland, underground and underwater, often in hostile environments - and supplies companies worldwide. An important reason for choosing Crawley was its proximity to Gatwick airport, which provides international access both for clients and for products being moved by airfreight.

French company FFA (UK) Ltd has set up a national distribution centre for DIY products at Wellingborough, Northants in the East Midlands. The move is expected to create 15 new jobs.

Chilean shipping company Compañìa Sudamericana de Vapores (CSAV) has opened a UK base in Liverpool, North West England, creating 60 new jobs. The company, founded in 1872, is one of the oldest shipping companies in the world and currently the largest in South America. It offers comprehensive services for general cargo, vehicles and fresh and frozen products, using both its own and chartered vessels and operating worldwide.

US giant Coca-Cola Enterprises, based in Atlanta, Georgia, has opened a new, high-tech production line at its facility in East Kilbride in Scotland. The company has invested $10 million in the new line, making its UK subsidiary the first in Europe to be equipped with the advanced technology. In the past five years, Coca-Cola has invested nearly $40 million in the East Kilbride plant.

Communications company Intrado, of Longmont, Colorado, has opened its first UK office at Leatherhead in Surrey, South East England. The company provides 9-1-1 emergency call infrastructure systems and services for the safety and commercial markets, as well as engineering and managing complex integrated data and telecommunications solutions. Its services include emergency call data management, wireless data services, target notification and data aggregation and delivery.

Software company GFI, based in Malta, is expanding its UK subsidiary GFI Software Ltd UK, moving to new offices in Kingston-upon-Thames in Surrey, South East England and increasing its staffing levels. The company is a developer of content security, anti-spam, messaging and network security software.

US component distributor Anixter International, based in Glenview, Illinois, has acquired Walters Hexagon Group, of Worcester in the West Midlands, for $41.6 million. Anixter distributes communication products, electrical and electronic wires and cables, fasteners and other small parts to original equipment manufacturers (OEMs). Walters Hexagon also distributes small components to OEMs, as well as providing inventory management services. The company has nine distribution and sales facilities in the UK.

General Electric, headquartered in Fairfield, Connecticut, is to buy UK medical group Amersham (based in the town of the same name in Buckinghamshire, South East England) for $9.5 billion in shares. Amersham, formed in 1997 through the merger of Amersham International of the UK, Pharmacia Biotech of Sweden and Nycomed of Norway, is active in the fields of medical diagnostics and life sciences. It employs more than 10,000 people worldwide and in 2002 had sales of more than $2.4 billion. GE will use the company’s expertise to add value to GE Medical’s diagnostic imaging, services and healthcare information technology businesses.

Western Union Financial Services of Denver, Colorado has bought a majority stake in mobile phone services provider Eposs, based in Swavesy, Cambridgeshire in Eastern England. Eposs is a leading player in electronic product delivery and payment solutions for the mobile top-up, entertainment and services market. Western Union is a world leader in money transfer and bill payment services, and has 165,000 agent locations in 195 countries around the world. It is a subsidiary of First Data Corp, which serves more than three million merchant locations. The purchase will allow the companies to expand Eposs services globally, taking advantage of a worldwide market that is worth $80 billion annually and is growing by $8 billion a year.

 

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