Member Article

Energy costs prompt concern among businesses

New data from the North East Chamber of Commerce (NECC) reflect the warning delivered to the region last month by the Bank of England’s deputy governor.

NECC’s quarterly economic survey, the North East Business Barometer, shows present economic turbulence is for the first time having a significant impact on business performance and confidence.

Businesses in the North East are feeling pain over soaring energy costs, as new figures show mounting concern among the region’s firms. The survey results reflect the words of Sir John Gieve, deputy governor of the Bank of England who warned NECC members at last month’s Durham Tees Valley Dinner that “the next year is not going to be comfortable for anyone”.

The Chamber reports ‘encouraging signs of resilience’, particularly among exporters and manufacturers, which give rise to hope that the region is well placed to withstand global pressures.

Worries over energy prices are the highest on record, with 87% saying they are an increasing concern. This rises to 98% for manufacturers. Meanwhile 82% cite increasing concerns over inflation.

NECC Chief Executive James Ramsbotham said: “These results underline our increasing nervousness about conditions for North East businesses, which face many of the same concerns we all do as consumers and householders.

“It is clear the Bank of England will not be able to address twin threats to growth and inflation through monetary policy alone. We need Government to support our members through this difficult period and recognise the serious implications of decisions such as tax rises on fuel, or increased empty property rates.“With service companies also under pressure, we also need public sector bodies in the region to make sure their procurement practices give these firms every chance of winning business.

However, Mr Ramsbotham did have some words of encouragement for North East businesses.

“Our strength in international trade puts us in a better position than any other UK region to withstand this turbulence. The positivity shown by manufacturers, particularly in the Tees Valley, reflects this.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .