Partner Article

Economic growth comes at a cost

New figures have suggested that the region’s economy has continued to grow in the first three months of the year since emerging from the recession.

However the North East Chamber of Commerce (NECC) data also shows that companies are not finding the journey to recovery easy.

The fragile recovery is revealed in NECC’s latest flagship quarterly economic survey –the North East Business Barometer – published in partnership with Barclays, which shows that companies performed markedly better in the opening months of this year compared with the same period of 2009.

A glance at the quarter-on-quarter performance however shows that seven of the 11 indicators are down on the previous quarter.

The report found that the ratio of North East companies enjoying an increase in UK sales in Q1 2010 rose by 26.6% on the same period last year while export sales climbed by 12.4%.

Meanwhile, 23.7% of firms envisage a future increase in the size of their workforce.

Martyn Pellew, NECC president, said: “NECC’s latest data demonstrates the significant progress made over the past 12 months. However it also shows that the North East is in for a bumpy ride during the economic recovery.

“Now, more than ever, we need the politicians running this country and this region to remove every possible barrier from the path of businesses. We cannot afford for the economy to stumble just as it is returning to health.

“The barometer shows clearly the pressing need for the ‘economic recovery test’ proposed by NECC in its 2010 manifesto to be brought into force to assess all new policy decisions affecting the region in 2010.”

Simon Lenney, Corporate Director for Barclays Corporate in the North East said: “At Barclays we have seen at first hand the resilience of businesses over the last 18 months but this report shows just how fragile the recovery is.

“We have been working hard with our customers across all sectors to provide continued support and the expectations in future turnover confirms our belief that businesses will emerge from the recession in better shape than before and able to capitalise on improving economic conditions.”

The North East economy enjoyed and endured both highs and lows during the survey period, particularly with the worrying announcement at the start that Corus would be mothballing its Teesside Cast Products plant.

Nissan’s heartening news that its Sunderland plant will produce the Leaf electric car from 2013 came late in the survey period and is unlikely to have influenced responses greatly.

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