INITIAL estimates of the employment impact of the Ravenscraig closure
were far too high, according to a computer analysis carried out by the
Fraser of Allander Institute.
It had been claimed in the wake of Wednesday's announcement by British
Steel that, on top of the 1220 direct job losses at Ravenscraig and the
Hunterston ore terminal, another 15,000 to 16,000 people in Scottish
companies supplying the steelworks also would lose their jobs.
However, the institute's forecasters, using their
medium-term model of the Scottish economy, put the knock-on figure at
5580 jobs between now and 1996. They also calculate the impact of the
loss of steel production on economic output at less than 0.5% of the
Scottish Gross Domestic Product.
The figure on job losses is based not just on the closure of
steelmaking at Ravenscraig but also on the earlier shutdown of the
plant's hot strip mill and on the recent closure of the Clydesdale tube
works. In total, the direct job losses from all three total about 4400
jobs.
''We might be a thousand jobs out,'' says the institute's steel
industry expert, Jim Stevens. However, he points out that the 1988
Arthur Young study for Motherwell District Council put the total job
loss from the closure of the entire Scottish steel industry at between
11,000 and 12,000 jobs.
Further, even after the Ravenscraig announcement British Steel will
still operate the Dalzell plate mill, the Imperial tube finishing works
at Airdrie, and Fullwood foundry, employing, in total, about 1750
workers. In its calculations, the institute assumes these will endure
beyond 1996.
Production industries will bear the brunt of the job losses,
accounting for just over 82% of the total estimate of 9980 jobs. Most of
that will be in manufacturing, which accounts for 78.5% of the total
loss. The service sector, on this analysis, will lose 1510 jobs (15.1%)
and construction will shed 280 (2.8%).
While the overall impact of the Scottish economy is more muted, the
local impact is considerable. About 85% of the job losses are projected
to occur within Strathclyde region, with the main incidence of that
being within the Lanarkshire travel-to-work area.
The forecasters also point out that the closure is taking place at a
time when, in both Scotland and the UK as a whole, economic activity is
weak. The impact will be harder to absorb than it would have been if it
had happened in 1994 or later, when growth is expected to resume.
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