By Matthew Legg Business editor

Last updated at 13:58, Tuesday, 07 October 2008

NEARLY 300 jobs were lost in Cumbria’s black September as the credit crunch arrived with devastating effect.

The Cumbrian Seafoods site at Maryport

Two hundred and eighty two redundancies were announced in sectors as diverse as car sales, cheese production and television news.

Few county companies have emerged unscathed from what has become the most profound economic crisis in living memory. And most commentators agree that this is just the beginning of what will become the biggest shock to the financial system since the Second World War.

Cumbria’s black September began with a double blow for Maryport. Up to 70 redundancies were announced at Cumbrian Seafoods, the fish processing plant.

That news was compounded a week later when the window and door manufacturer West Port, one of Cumbria’s most startling success stories of the last decade, confirmed it could be shedding up to 25 jobs.

Haulier F Brown, of Cardewlees, near Carlisle, followed, with reports from the workforce it could be axing more than 20 driving jobs. The company has so far refused to comment.

Then came a truly horrendous weekend when 102 confirmed job losses came in the space of five days.

On Friday September 26, First Milk announced 11 jobs would go at its Aspatria cheese factory.

The following Sunday, Alcan told staff at its Workington packaging plant that 40 jobs would go.

And two days later, ITV confirmed that 51 people were being thrown out of work as part of a merger between Border TV and Tyne Tees.

On the same day, it emerged that jobs could be going at Carlisle Airport-based ECM, the nationwide car delivery firm, as part 45 redundancies at depots across the country.

Though no two businesses ever experience the exactly same set of pressures, most agree these problems are being driven by one factor above all others: a calamitous loss of confidence.

As house prices slump, credit becomes more expensive and jobs appear less secure, consumer spending drops accordingly and that has had a devastating effect on the economy.

Rob Johnston, chief executive of Cumbria Chamber of Commerce, agreed that the paralysing slump in consumer confidence was the chief culprit in the trend towards job losses. “Not all of the recent announcements about jobs in the county are a result of the credit crunch and problems in the financial sector,” he said.

“Of those that are, though, some have been directly hit through falling demand. For others the issue is principally one of confidence.

“Businesses are quite rightly responding to where they think the economy is going so we really need to get confidence back quickly.

“They are concerned that demand for their products and services will fall, that this will be maintained for a lengthy period and that they’ll face problems ensuring the finance that they need to operate.

“All businesses rely on the banking sector, not just for borrowing but for day-to-day business transactions too.

“A banking sector that isn’t working properly can put businesses under pressure.

“There’s real concern that businesses won’t get the facilities they need, meaning some may be unable to continue and others will have to contract their activities and plans, with a detrimental effect on the economy.”

The housing market and the car sales industry in particular have been badly stung by the dip in confidence.

There are fears that 2009 could see a virtual halt in the house building in Cumbria.

At least one county construction firm has stopped new build projects and is instead focusing on home improvement work.

Worst could also be yet to come for the car sales industry. Dealers are likely to follow the lead of Cumbria and South Yorkshire business GK Ford, which has already laid off a number of salespeople in response to the downturn.

The crisis-hit banking sector is also unlikely to escape without heavy job losses.

The takeover of HBOS by Lloyds TSB sparked fears of job cuts running into thousands, as did the part-nationalisation of the Bradford & Bingley.

Cumbria’s financial industry is not huge by national standards, but it employs many people and most are facing an uncertain future.

The one shaft of light in a gloomy picture for Cumbria is that we are less exposed than some to the worst ramifications of the credit crunch.

Our economy is not heavily reliant on the financial sector, like much of the south east’s.

We boast a relatively strong manufacturing base, which is underpinned by the twin pillars of Sellafield and Barrow shipyard, both of which are as immune as it is possible to be from the current woes.

In his Cumbria Economic Bulletin for September, Professor Frank Peck, of the University of Cumbria, said: “The impact of the credit crunch, housing market crisis and negative effects on employment and growth have not yet been felt to any large degree in Cumbria. It remains to be seen to what degree Cumbria will be affected by these wider international and national trends in the economy.”

On the outlook for the north west, he said: “Forecasts prepared by an independent regional economic forecasting panel suggest that the rate of growth will decline in the north west but not as much as in the UK as a whole.

“Recovery, however, may be slower in the region compared to the UK average. The expectations are based primarily in structural differences in the economy of the region.

“In particular, while there is substantial activity in financial services, the north west is in general less dependent on this sector compared to many others, including London and the wider south east region.

“Recent surveys show declining business confidence in the manufacturing sector, in particular concerns over rising costs of materials and energy. There is also an expectation of reduced growth in retailing, tourist-related activities and in construction, though there is no reason to expect these impacts to be worse than the UK average.”

First published at 11:49, Tuesday, 07 October 2008
Published by http://www.newsandstar.co.uk