The past two months have been something of a roller-coaster ride for the West Midlands. The region became the focus of national and international interest while BMW ummed and ahhed over the future of its Rover subsidiary. When it looked as if the Longbridge plant might close, many saw its demise as the industrial heart of the region being ripped out.
So, there was a huge sigh of relief when the Phoenix bid, led by former Rover chief executive John Towers, was accepted in early May. But would the car manufacturer’s collapse really have spelled disaster for the local economy? And is the continuing uncertainty about its long-term future, and the immediate prospect of job cuts at Longbridge, denting construction confidence?
Unsurprisingly, the director of one Birmingham contractor that has been directly affected thinks so. His firm was poised to win a project with a Rover supplier when the problems started. “The company pulled the plug on the job. We were pretty unhappy,” he says. “It’s created a lot of uncertainty. Quite a lot of schemes that were due to go ahead are now in doubt. The construction industry will be much happier when the Rover situation settles down.”
Mowlem Midlands marketing manager Richard Green also believes that the car maker’s troubles have had an impact. And he thinks the Phoenix deal has been important: “The rescue of Rover has had a significant effect on morale in the area.”
But these seem to be lone voices. Most people involved in construction in the West Midlands say Rover’s predicament is not a major concern, pointing to the continuing upturn in the property and construction markets. Recent figures have shown that £1.5bn is being poured into regeneration projects in Birmingham over the years to 2003. “Clearly, there will be an impact on local businesses from the Rover situation,” says Rob Kennedy, director of MDA’s Birmingham office. But he feels that the area is in a positive state. “Birmingham as an area is still very buoyant. Birmingham people are extremely resilient and very resourceful, and they will get through this.”
Others think that the present strength of the market will offset any negative influence from Rover’s plight. “People were predicting a crash 18 months ago but no one is talking about recession now,” says Mike Pyle, senior partner in Birmingham and Wolverhampton architect Mason Richards Partnership. However, he adds: “I think it could have been a calamity for the region if the economy had been in a worse state.”
Birmingham turns away from industrial past
There is also doubt among construction firms in the West Midlands about just how significant the whole manufacturing industry is to the region. “Not withstanding the Rover situation, there has been a tremendous shift away from the manufacturing sector. There is a really vibrant economy out there, particularly in the service sector,” says Alan Crane, UK managing director of Christiani & Nielsen, which is building the Millennium Point education and technology centre in a joint venture with local firm Galliford. Crane’s view is echoed by HBG Midlands regional director Richard Dakin. “Generally, the manufacturing sector has not been particularly buoyant. Other sectors have been driving success in the area,” he says.
Testament to the confidence within the market is the speculation surrounding the redevelopment potential of Rover’s Longbridge site. The factory occupies a sprawling site and industry sources believe that part of it will be sold off by Phoenix. “It has to be one of the most important potential sites in the region,” says Crane, adding that its location at the junction of the M6 and M42 gives it extra significance.
Just what sort of redevelopment it would be is not clear, although sources in the area believe the scheme would have to have a significant job-creating aspect to it. “I think it would be an ideal site for a business park and a mixed-use development,” one says. However, a Phoenix spokesman dismisses the talk of a massive development on the site as just that: talk.
Megaprojects that are definitely going ahead in the centre of Birmingham include the £400m Bull Ring retail development, the £100m Mailbox mixed residential, office and retail project and the £113m Millennium Point. These have led to city figures such as council leader Albert Bore claiming that Birmingham will become the major centre for business and tourism in the UK.
Future Systems’ proposed £40m Selfridges department store, part of the Bull Ring complex, is expected to be the springboard for an influx of major retailers. “Once the Bull Ring goes up, it will really open up the centre of Birmingham,” says Crane. “The biggest disincentive to go shopping there is getting around. Even seeing where you are going is difficult.”
Major regeneration projects are not restricted to the heart of Birmingham. A £50m retail, leisure and residential complex is already under way in the Jewellery Quarter, north of the centre. Designed by local architect Nicol Thomas, the scheme, which will revamp a redundant 1920s factory and is due for completion at the end of the year, will include the city’s first £1m penthouse.
Mowlem’s Green points to warehouse and factory residential conversions as a particularly strong market for Birmingham. Other West Midlands cities are taking up the brownfield regeneration baton as well. Roger Ingall, managing director of Birmingham architect Temple Cox Nicholls, says: “The way that we are capitalising on our brownfield assets in critical areas of Birmingham is now spreading.”
According to MDA’s Kennedy, Coventry is seeing its own renaissance. Work is continuing on the £24m Phoenix Initiative, a series of linked gardens and a piazza in the city centre designed by MacCormac Jamieson Prichard and Robert Rumney Associates. Work is also due to start on the £20m, Aukett Europe-designed Lower Precinct shopping complex, for which developer Arrowcroft has just secured funding.
Coventry has also attracted a major industrial project, with IT and telecommunications giant Marconi announcing a £100m communications centre in a former airfield in the Ansty area of the city. This led trade and industry secretary Stephen Byers to extol the virtues of the region, and predict that more multinationals would take up residence in the West Midlands.
With the market healthy, contractors and consultants across the region are reporting skills shortages. “This is the biggest issue facing the industry at present,” says Mowlem Midlands’ Green. As far as labour prices are concerned, the region is seeing above-average increases, according to one QS. “Contractors and subbies are being more selective,” he say. However, this has yet to trickle down to margins, which contractors say are still tight for capital projects.
On the whole, local firms remain bullish about the area’s prospects. “Birmingham and the area as a whole has some way to run,” says Green. And Mason Richards’ Pyle has proof of the region’s improved status: “People who live in Luton go to Birmingham for a night out rather than London these days.”