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'Further problems' for North East

A leading analyst has predicted further problems for the region during the recession.

Nick Parsons, head of market strategy at the National Australia Bank and UK economist for Yorkshire and Clydesdale Banks, was in the region this week. He addressed more than 100 business people at seminars held in Thornaby, Stockton.

He said: “The good thing about the public sector over the past couple of years is that it has helped insulate the North East from some of the worst of the downturn - it has provided a cushion.

“But crucially, with the government set to borrow more than £700bn over the next five years, there is going to be much less of a positive contribution from the public sector.

“If anything, what has been a help over the past few years is going to turn into a drag for the next three to four years.

“A relative strength of the region is going to have an opposite effect.”

But he said that after meeting business people in Teesside, there seemed to be long-term optimism in the private sector.

Mr Parsons believed companies which exported goods were in a good position, and predicted that there would be some good news for retailers at the end of the year, with retailers encouraging consumers to buy before VAT rises again.

And he believed small businesses had a crucial role to play.

He said: “The SME (small and medium-sized enterpise) sector is the backbone, not just of the North East, but the whole UK economy.

“It is massively overlooked, they don’t get the attention or credit they deserve.”

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