The politician responsible for boosting the Birmingham economy has warned that high street spending is slumping at unprecedented levels.
Neville Summerfield, city council cabinet member for regeneration, said he was “deeply concerned” about the recession, which he expects to deepen.
Coun Summerfield (Con Brandwood), a businessman who owns a florist shop in Kings Heath, said it was as if “everyone’s purse has been emptied”.
He told the regeneration scrutiny committee: “I have seen retail trade collapse extraordinarily in a way that has never happened before.
“People are saying it will be all over soon, but I don’t think we have seen the worst yet. We just have to position ourselves as a council the best we can.”
However, Coun Summerfield remained unexpectedly up-beat about the city’s major development plans.
In sharp contrast to Government expectations, which predict that the professional services sector will suffer particularly badly in this recession, he insisted 2008 would be an “exceptional year” for the opening of new high-quality offices in Birmingham.
“It’s not all doom and gloom, there is a lot in the pipeline," he added. “There is optimism and a lot of private sector schemes are going through."
Major office schemes under construction include:
• 45 Church Street – 124,000 sq ft.
• Eleven Brindleyplace – 107,000 sq ft due for completion in January.
• Snowhill – 575,000 sq ft, of which half is pre-let to KPMG and Barclays Bank.
• Calthorpe House – 105,000 sq ft, due for completion in March.
• The Cube – 110,000 sq ft due for completion Spring 2010, with half pre-let to the Highways Agency.
Projects where work is yet to start, include the £150 million British Land Tower in Colmore Row and a £70 million scheme to redevelop the former Bank of England building in Temple Row.
Coun Summerfield did not dwell on the failure of private investors to let all of the Grade A office space completed in the past two years.
He told the committee he did not have any figures on the proportion of vacant office accommodation in Birmingham.
But a written report in his name pointed out that Colmore Plaza, a 310,000 sq ft scheme, completed earlier this year, is only partly occupied.
Baskerville House, the redevelopment and expansion of a 1930s building in Centenary Square, has been heavily promoted by the council but developers Targetfollow have let only 45 per cent of the space since the beginning of the year.
The report added: “The global banking crisis will have repercussions for investment plans and an economic recession will have its impact on investment activity. Looking towards the future, our task will be to identify and exploit all opportunities that emerge and ensure in collaboration with our partners that we are positioned to take advantage of the upswing in activity that will emerge in due course.”
Scrutiny committee member Coun Phil Parkin (Con Sutton Trinity) was not convinced: “We are living in a different world economically. There are terrible predictions that the West Midlands is going to lose 180,000 jobs and the feeling I get is that things are going to be bad,” he warned.