Peter Jackson column

Aug 25 2005 By Peter Jackson, The Journal

Over the last 10 years the decline of the UK's manufacturing sector has been a constant refrain.

This has been particularly the case, for obvious reasons, here in the North-East.

The full extent of that decline was made clear over the weekend with the publication of figures by the Office for National Statistics.

These reveal that from 1995 to 2003 the manufacturing sector's share of the economy fell by a third, from 21% to 14%.

But, more arresting even than that, is the revelation that the City of London accounts for more than twice manufacturing's share of the economy, with banks, insurers, management consultants and other financial services providing more than 30% of the UK's wealth.

And it's a trend that seems set to continue. While manufacturing is losing 7,000 jobs a month, it is reported that the City of London jobs market is growing strongly.

In July, the number of vacancies in the City was nearly 6,000, up a third over the previous year. In the same month, the average City salary was £50,473, up 3.2% on the year before.

This can only leave one wondering - where does this leave us?

The decline in manufacturing might be halted and there could even be some revival, but is never going to occupy the place it once did.

There are the new industries, such as computer services, the fastest growing sector, which has risen nearly fourfold since 1992 and the creative sector now accounts for more than 9% of the economy.

But I suspect our future could lie in getting a slice of the City's action.

Much of the City's transactions depend on networking and human contact, but not nearly as much as was once the case.

Stock jobbers no longer jostle on the floor of the Stock Exchange and most business is done internationally by telephone and email.

Most back-office and settlement functions can easily be moved out of London and many institutions have successfully done this.

As London property prices and salaries rise ever-upwards the economic case for the financial institutions to move functions out to the regions becomes unanswerable.

And if this strikes anyone as fanciful or wishful thinking, I would only remind them that one of the biggest current contributors to the region's economy and employment is a leading financial institution - Northern Rock.

You don't have to be in London to be in the City.