UK economy: Two views of the recession

The recession has not been quite as deep as first thought, but it certainly has not gone away.

The latest figures show the economy shrank by 0.5% in the second quarter of the year, not the 0.7% drop first estimated by the Office for National Statistics.

That still means the country has been in recession for the past nine months.

But as we found out by talking to two industrial businesses, there have been big differences around the country.

Paul Allison, Managing Director of Sherburn Stone

Paul Allison Paul Allison of Sherburn Stone says exports have been a lifeline

The Sherburn group manufactures and distributes heavy building materials in the north of England and southern Scotland.

That includes aggregates, sand, concrete, asphalt and cement.

For instance, it provides asphalt and road surfacing services for the Highways Agency trunk road network and it picks up rubble from demolition jobs.

It also provides haulage, surfacing and waste disposal services.

All of these businesses have suffered recently.

The one bright spot has been in supplying farmers with agricultural lime, concrete, asphalt, sands and aggregates, for building sheds and yards, for example.

Paul Allison says that has kept staffing levels up and plants open.

"These days national figures are meaningless in the regions, in the North East construction activity has been flat for four years now.

"I have managed to keep going but we have not made any money for four years.

"To maintain business I have expanded with new products [for instance] increasing our exports of high specification agricultural lime, which we export in thousands of tons to Germany and Denmark.

"We do see early sign of change - manufacturers are starting to build factories and new facilities.

"We are getting enquiries for next year - the ports are increasing their facilities and they are a barometer of economic activity, so we think there is a change."

Gary Agnew, Finning UK & Ireland, Cannock, Staffordshire

Gary Agnew Gary Agnew of Finning says government spending on big projects would be very welcome

Finning primarily distributes new, and rebuilds old, Caterpillar products for the UK market.

It sells everything from mini-diggers for housebuilders to large scale mining equipment.

Things have been tough in recent times over a variety of different sectors - from construction through to waste disposal - but the company has been able to hold on to staff during tough times.

It has had to completely redevelop its business to adapt and now even deals with blown-up or damaged equipment from Afghanistan.

It has also been investing heavily in graduate training and apprenticeships.

Gary Agnew is feeling confident this investment will prove worthwhile.

"In the last couple of weeks our customers have been placing additional orders with us [in the South East].

"There is a big distinction in our minds between the South East and the rest of the country.

"In the North, there have been harder times over the last couple of years.

"Scotland has stayed constant but the South East has been a bubble in some ways.

"From an export point of view, quite a lot of our products go into other people's equipment and there is a strong demand so export manufacturing does seem to be quite positive.

"Some shovel-ready projects from the government would make a tremendous difference to stimulate activity in the near term".

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