The North East’s exporters and manufacturers continue to drive the region’s economy, but global economic uncertainty continues to impact on regional business.
The North East Chamber of Commerce’s (NECC) quarterly economic survey demonstrates once again that the region continues to perform well in overseas markets, but weakening UK sales and a poor service sector performance mean that growth levels are still not sufficient to offset public sector cuts.
NECC’s North East Business Barometer, produced in partnership with Barclays, is a trends survey that shows the health and direction of the North East economy measured across 11 separate indicators. Any score above zero indicates trading conditions are improving.
The indicators demonstrate increases in export performance and workforce levels, but decreases in UK trade and investment.
The Q4 Barometer demonstrated prices on the rise with positive results for current workforce recruitment.
It also shows a clear gap between business sectors with manufacturing and export again providing much of the positivity.
NECC Chief Executive, James Ramsbotham, said: “With a huge amount of uncertainty surrounding the global economy at the turn of the year, it is no surprise to see this reflected in most businesses in the final quarter of 2011.
“The continued excellent performance of region’s manufacturers and exporters perhaps demonstrates why the North East growing more strongly than much of the rest of the country, according to regional GVA estimates published in December.
“The importance of a healthy manufacturing sector cannot be underestimated, but in general manufacturers have been carrying the North East recovery for too long and this imbalance is unhealthy. The North East needs to see UK sales and workforce growth in the service sector if we are to maintain a robust business base.”
Emergency lighting manufacturer Tridonic, which employs 192 people at its Spennymoor plant, is one company that has expanded its overseas trade due to the slowdown in UK markets, exporting up to 40% of its products mainly to Europe and the Middle East.
Operations Director, Stuart Sloane, said: “The UK market has been depressed for some time so it makes sense to seek new markets overseas. We have opened up highly successful markets in Europe, Middle East and Australia which have proved incredibly lucrative.”
Brian Thorpe, Head of North East, Barclays Corporate, said: “Confidence is key. Large numbers of businesses are not investing and while we try to encourage them to do so, many businesses are preferring to sit on cash which is understandable. Similarly, until individuals become more confident in employment prospects, they won’t spend. Restoring this confidence must be our goal for 2012 in order to protect and strengthen what remains a fragile recovery.”
