As markets react to economic crises on both sides of the Atlantic, it’s not all doom and gloom for the British economy this morning. In a move bound to bring some cheer to the UK jobs market, 1,000 posts have opened up at Corus’s former steel plant in Redcar, Teesside. But in a sign that the job market is still pretty flat, 10,000 people are expected to apply.
The thousand jobs being offered is also significantly fewer than the number working at the site before it was mothballed in February 2010. Some 1,600 jobs were lost last year after international buyers stopped placing long-term contracts to buy Corus’ products, forcing the site to close.
But foreign investors continued to be optimistic about the British steel industry. Six months after production ceased, Sahaviriya Steel Industries, the biggest steel producer in Thailand, snapped up the works - which produces cast and slab steel products - for £320m from Tata Steel. India-based Tata had already bought Corus four years before for almost £7bn as it sought to boost its steel production.
Its optimism appears to have been well-founded: despite the economic downturn, British steel manufacturing is one industry which has stayed relatively healthy. The latest figures from UK Steel, a division of manufacturers' organization EEF, show that steel output in the second quarter of 2011 averaged 193,000 tonnes a week – 2.3% higher than the first quarter. On the other hand, even steel isn’t immune from falling consumer demand - steel production in the UK is still around one third below pre-recession levels.
SSI’s investment will no doubt bring some good news to the North East, where economic growth and activity expansion still lags behind the national average. It’s committed to invest another £300m in Teesside, on top of the £320m it spent buying the site.
The re-opening of the plant will also give a boost to British exports - much of the steel produced at the plant will be exported to Thailand for use in its specialist facilities such as car production. So the furnace is burning again for the North East steel industry; although considering job applications are likely to be 10 times oversubscribed, not many will get a chance to polish off those rusty skills.