THEY were the pinnacle of the successful and audacious regeneration of one of Scotland's most down-at-heel regions. The Gregor Shore developments on the coast at Leith had been marketed as ideal residences for the young executives flooding into the area, and had commanded prices in the region of £1 million.
But yesterday, the cement mixers and drills had fallen silent at Granton Anchor and Platinum Point.
Gregor Shore, which employs 120 people, had been forced into administration by the "material slowdown of the property market".
The bleak news from the Leith seafront coincided with brutal new unemployment statistics showing the biggest jobless rise for 17 years.
Ministers were warned UK unemployment could hit three million, as the total soared by 164,000, more than 10 per cent, in the quarter to August, reaching 1.79 million.
The position in Scotland, which has seen unemployment buck the UK trend and fall for the past three quarters, was even worse. The jobless total rose by 19,000 to 124,000 – a rise of 18 per cent – the biggest increase since the early 1990s and the sharpest rise over the past three months of anywhere in the UK.
The figures came as Freescale, a United States-owned computer chip firm, said it was axing 800 of its 1,000 jobs in East Kilbride and halting all manufacturing at the plant.
The Fife electronic manufacturing services firm Cemtron has also shed 41 jobs, a week after slipping into administration.
In total, the rising tide of unemployment in Scotland has resulted in the equivalent of 34 new people signing on for jobseeker's allowances every day over the past three months.
Scotland is doing better than the rest of the UK in overall terms, with an unemployment rate of 4.7 per cent – a full one point below the UK average. This is also well below the European average of 7.5 per cent.
But experts warned last night that Scotland was starting to feel the full effects of the economic slowdown and that unemployment would gather pace for the rest of this year, and probably into the next two years as well.
The construction, manufacturing and retail sectors were the worst hit in the latest quarterly figures. And experts warned that the collapse of Gregor Shore would not be the last such example among construction firms.
The financial services sector, which is crucial to the health of the Edinburgh economy, is also expected to suffer significant job losses over the next few months, as are farming and tourism, but to a lesser degree.
Rising unemployment helped depress the stock market. In London, the FTSE 100 fell 311.17, or 7 per cent, to end the day at 4083.04, while in New York, the Dow Jones index tumbled 733 points, or 7.9 per cent, to its second-largest loss ever.
The falls were triggered by deepening fears of recession across the economies of Britain, the United States and Europe: George Bush, the US president, said the downturn would take a long time to fix. Retail sales figures in the US also turned out much worse than feared, with analysts predicting the country is either in recession already or moving that way.
The UK unemployment statistics coincided with the release of the latest business survey from the Scottish Chambers of Commerce, which warned there was now "clear evidence of a looming recession".
Liz Cameron, the group's chief executive, said: "The continuing problems in the global financial sector, general slowdown in the international economy and continued price inflation are real problems for Scottish business."
Experts warned that rising unemployment figures and the gloomy Chambers of Commerce survey pointed to a severe and extended slowdown. Vicky Redwood, of Capital Economics, said that, at the current rate, the number of people claiming jobseeker's allowance would top a million by the end of this year.
Total unemployment would rise by 1.5 million to about three million by the end of 2010, she predicted.
Howard Archer, the chief UK economist at Global Insight, said: "This is a worrying set of labour market data that indicate overall that the jobs market is being hit ever harder by the deepening economic downturn and deteriorating business confidence. It seems inevitable that unemployment will rise sharply further over the coming months as near certain recession and depressed business confidence impact.
"Extended, very tight credit conditions would also be liable to lead to firms having to shed jobs."
The gloomy statistics also showed a much steeper decline in female employment than in male employment, but this was not reflected in the actual unemployment figures.
This suggests that women, who make up the bulk of part-time jobs, were being laid off but not registering for benefit or declaring themselves unemployed.
Gordon Brown, the Prime Minister, vowed to do all he could to keep people in jobs, pointing out that unemployment was higher in the US, Germany, France and Italy than in Britain.
Unions and opposition politicians pressed the government to halt its programme of Jobcentre closures and 12,000 job cuts in the Department for Work and Pensions in the face of lengthening dole queues.
In the Commons, William Hague, the shadow foreign secretary, standing in for Tory leader David Cameron at Prime Minister's Questions, said it was a "grim day" for the British economy, and claimed a government promise of £100 million to help retrain the jobless, which had been previously announced and would be spread over three years, worked out at only £18 for each unemployed person.
But Jim Murphy, the Scottish Secretary, said: "Every country in the world is facing real economic challenges.
Our priority must be to help people back into sustainable employment quickly and we will use every method at our disposal to make that happen."
John Swinney, the finance secretary at Holyrood, said of the latest jobless statistics: "These figures are obviously disappointing, but they confirm everything the Scottish Government has been saying about how the financial crisis is impacting on the real economy."
How Platinum Point transforms the skyline – as well as the economic profile – of the Leith and Newhaven areas
A luxury vision – but what now for Leith waterfront?
LUXURY developer Gregor Shore blames the "material slowdown" of the property market for forcing it into administration.
But some say a reining back of changes that have been sweeping Leith for several years may be no bad thing.
Last night, property experts said the company's demise signalled the start of a slowdown in the regeneration of the port – but claimed this was not before time.
The administration puts a question mark over the Waterfront Development – a hugely ambitious project taking in retail and residential buildings. It also means job cuts among the 120 staff at Leith-based Gregor Shore.
Willie Hunter, chief executive of the Edinburgh Solicitors Property Centre, said of the announcement: "From the point of view of future development, it is very big news. I would guess it will put things on hold.
"On the other hand, there has been a feeling that the whole Leith area regeneration was beginning to reach saturation. It is probably not a bad time for a well-earned breather."
The flats at the developments are nearly finished, with only 35 still awaiting completion certificates.
However, the common ground still resembles a building site, with discarded tools and scaffolding and broken advertising signs hanging from fences.
John Reid and Patrick Lannagan, of Deloitte and Touche, were appointed joint administrators on Tuesday.
The firm said: "Due to the material downturn in the housing market, Gregor Shore has been suffering severe cash-flow problems and the directors concluded they had no other option than to appoint administrators.
"It is the administrators' intention to complete the company's two major developments, Platinum Point at Newhaven Harbour and Anchor at Granton Harbour."
Platinum Point was built in two phases, with about 500 flats in total.
The Anchor comprises 135 apartments.
Ron Hewitt, chief executive of Edinburgh Chamber of Commerce, said: "The Waterfront project is going to happen. This just means a degree of delay."
Erikka Askeland and Lindsay McIntosh
Who's feeling the pinch – and where axe may fall
• CONSTRUCTION
A total of 15,000 Scottish jobs in housing construction went in the first half of this year, with a further 30,000 expected to have been lost since June.
The rate of decline in commercial construction has also hit record levels. Howard Archer, chief economist for Global Insight, said earlier this month: "The construction sector is now clearly very firmly in recession."
• RETAIL
Scotland's retail sector has had a reasonably good 12 months, better than the conditions in England and Wales. But there are now definite signs of a slowdown.
The run-up to Christmas is crucial for retailers, but there is evidence that it could be the worst for many years, and the January figures are expected to show a major slump in sales.
Fiona Moriarty, of the Scottish Retail Consortium, said: "Retailers will have to be thinking very carefully about staffing levels and the number of seasonal staff they take on in the run-up to Christmas."
• MANUFACTURING
Manufacturing has been experiencing the steepest decline of any sector in Scotland. A combination of rising costs and a loss of customers has been to blame.
There has also been a warning that confidence is at a "record low".
Data from the Office for National Statistics has shown a 46,000 drop in the number of manufacturing jobs across the UK for the past three months, to a record low of 2.87 million.
• TOURISM
There are positive signs, in that the strong euro has made Scotland a more attractive place for Europeans to visit, but there will be contractions at the higher end of the market.
A spokesman for VisitScotland said: "We will probably find that things like caravaning and camping will at least be stable, but things which are more expensive, like hotels, particularly long stays in hotels, may start to contract a bit."
However, according to the latest Scottish Chambers of Commerce survey, visitor numbers were down in the first quarter of this year and have declined in every quarter since.
• FINANCIAL SERVCIES
The financial services sector is facing the most worrying time of all, and the banking crisis has left many institutions unsure of their future.
Job losses have already been predicted if the Lloyds TSB/HBOS merger goes ahead, and more are possible at RBS after its part-nationalisation by the government.
The whole sector is expected to go through a period of contraction and retrenchment over the next 12 months after years of expansion. This will be bad news for Edinburgh in particular.
• FARMING
High fuel prices, soaring feed costs and a wet summer combined over the past few months to put massive pressure on Scotland's farmers.
This has now been compounded by a contraction in borrowing and, for farmers who do manage to get finance, the rates are much higher than they were a year ago.
A spokeswoman for the National Farmers' Union Scotland said: "It may be the final nail in the coffin for many of them. It may just force some people to give up before they wanted to."
UNEMPLOYMENT IN NUMBERS:
English north-east 7.7%
London 7.5%
Wales 5.9%
UK average 5.7%
Scotland 4.7%
English south-west 4.1%
Euro area 7.5%
Germany 7.4%
France 7.2%
United States 6.1%
The full article contains 1907 words and appears in The Scotsman newspaper.
