The West Midlands is set to lose 180,000 jobs as the recession bites, local councils have warned.
It follows the Bank of England’s admission last week that Britain was already in a recession. The West Midlands will be hard hit because of the importance of manufacturing to the local economy, according to analysts.
The stark warning was issued by the Local Government Association, which represents authorities in the UK.
It has organised a summit in London in which officials from councils, including Birmingham, will meet to share ideas about how to save jobs.
But Birmingham City Council leader Mike Whitby said: “We are confident that, as in the past, the city will emerge stronger from the recession.”
More than one in 20 jobs in the region is at risk, according to a study produced by consultants Public and Corporate Economic Consultants on behalf of the Local Government Association.
It looked at the structure of each region’s economy, its performance over the last two years and its performance during the last two recessions.
By December 2010, the West Midlands will suffer a net loss of 180,000 jobs, the study predicts. This includes positions which go unfilled after an employee leaves or retires, as well as redundancies.
Along with construction, manufacturing is one of the sectors expected to suffer the worst of the downturn.
However, the study also notes that the effects of the recession would be even worse if the region’s economy was not fundamentally strong.
The study said: “The West Midlands has a high proportion of industries which are likely to be affected by the recession. The region performed averagely in the last two recessions but slightly above average in the last two years.”
It warns that the picture varies across the country, with London and the south east likely to suffer more during the recession than the Midlands and north.
Local government leaders are to call on the Government to devolve more power to councils, allowing them to draw up strategies for supporting their industries and workforce.
Margaret Eaton, chairman of the Local Government Association, said: “The recession is going to hit different parts of the country in very different ways, and even within individual regions there are marked differences as to how local areas could fare.
“It is clear that a national, one size fits all approach to dealing with the recession simply isn’t going to work.”
Coun Whitby said: “While it is inevitable that the current economic climate will have some impact on unemployment rates, we believe Birmingham is perhaps better placed than most UK cities.
“This in part is due to at least £6 billion worth of publicly funded projects, and associated job opportunities, currently on the city’s books, such as New Street Station and the new central library which are less vulnerable to delay than private developments.”