DERBYSHIRE FACES UNCERTAINTY
Copyright 2001 Derby Evening Telegraph

[ September 26th 2001 ]

The Derbyshire economy faces testing times for the rest of this year and beyond, an expert will tell the county’s business community tomorrow. A period of much weaker UK and global growth and the likely economic impact of the United States tragedies will compound problems caused by the decline of some of the county’s traditional industries, Royal Bank of Scotland group chief economist Jeremy Peat will tell an audience in Derby.

However, Mr Peat will sound an optimistic note, saying: "In the past Derbyshire has fared better than might have been predicted and, in our experience, continues to out-perform expectations." During the breakfast briefing at the Midland Hotel, Mr Peat will urge the Bank of England to use the current scope for interest rate cuts to help the local and UK economies.

Derbyshire remains one of the most heavily industrialised counties in the East Midlands, with chemicals, furniture and IT joining the county’s industrial base of heavy engineering, iron founding and coal mining. Hi-tech firms such as Pride Park internet bank Egg and Lara Croft creator Core Design have joined long-established firms such as aero engine manufacturer Rolls-Royce, the train maker now known as Bombardier Transportation and textiles companies.

Mr Peat believes that the East Midlands had performed relatively poorly compared with other UK regions and Derbyshire had under-performed compared to some other parts of the region. "Derbyshire has comparatively low output GDP per head is just 80 per cent of the UK average and has high unemployment compared both with the East Midlands region and the UK as a whole," he said. "With industry more heavily concentrated in manufacturing and traded sectors, the short term outlook for Derbyshire must be of concern."

Mr Peat said, however, that comfort could be taken from the fact that many local manufacturers had performed well by developing niche markets. He added: "Derby and Chesterfield have received significant investment, drawing consumers back into the urban areas, and the introduction of new service sector and hi-tech businesses has increased optimism across the county."

"The mood though is one of uncertainty, for the UK and Derbyshire. Until the impact of events overseas becomes clearer, it is difficult to predict the way forward for the local economy." Mr Peat said it was too early to predict the impact on the UK of the terrorism in the U.S. but added that U.S. growth would almost certainly be slower this year, which would immediately affect UK tourism, travel and insurance.