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Long-term prosperity looks good
From the Swindon Advertiser, first published Friday 23rd Mar 2001.
He who wags the lion's tail stands in danger of being bitten. So goes the story, usually in relation to our former empire and the dire consequences of such action.
Not any more.
As has become only too evident in recent weeks, the boot is on the other foot these days, as British satellites of US and Asian corporations twitch to the tune of the turbulent hi-tech markets in their respective areas.
So, given that Swindon is at the heart of Europe's silicon valley, with such massive North American corporations as Motorola, Lucent, Tyco, Intel and Mitel, as well as other major industries, playing a large part in our affairs, how much do the convulsions of these giants affect the local economy?
Already, we have seen job losses to the tune of 700 people at Motorola's Groundwell manufacturing plant.
With enormous contractions in the telecoms industry going on globally 10,000 at Lucent alone people working for US companies generally, quite understandably, view the future with some pessimism as the knock-on effects are felt.
But are their fears justified and is our local economy being affected?
Bob Owen, chief executive of the Swindon Chamber of Commerce, doubts it.
"Swindon's economy benefits from the success of attracting inward investment from a large number of corporations from around the world.
"Those located here include a number of companies from the US and Japan.
"Inward investment decisions are driven by a number of factors, not least the desire to establish an operating base from which to access the 250 million consumers who make up the European Union.
"While the US and Japanese markets have seen a slowing down, the UK economy's prospects appeared to have strengthened and the euro zone seems little affected by the uncertainties emanating from the United States.
"With both the UK and euroland economies continuing to show strong growth and exports to the EU now accounting for more than 65 per cent of all our exports, the short-term trading prospects look encouraging.
"I have no doubt that those corporations from both the US and Japan are reviewing their global investments but there is no indication that their operations in Swindon are seriously at risk."
The main problem for Swindon is that the contractions in US and Japanese corporations come at a time when British manufacturing generally is slowing down and facing tougher times.
On a broader front, a new Confederation of British Industry survey shows that, over the past month, demand and output expectations deteriorated further, with the US slowdown having a more serious impact on the UK than first thought.
Total demand for manufactured goods in March fell again, while output expectations for the coming four months have weakened for the second consecutive month, the CBI said.
Of the near-900 manufacturers surveyed, 15 per cent said total orders were above normal but 38 per cent said they were below, giving a negative balance of 23 per cent the worst since July 1999.
Export orders were still below normal, while declining total demand was reflected in the weakened output expectations.
Kate Barker, the CBI's chief economist, said: "This survey is further evidence that the troubles of the UK's manufacturing sector are far from over.
"The US slowdown may have a more serious impact on the UK than first predicted. Higher stock levels and falling demand are already causing companies to rein back their output plans."
The message for the Swindon economy appears to be this: In the short term, use caution. Otherwise, look forward to continued prosperity.
There is just too much enthusiasm at the heart of Swindon business and determination to succeed to allow the present trading hiccup, here and overseas, to turn into disaster over the long term.
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