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Long road to recovery

THE North East economy is continuing to experience a bumpy exit from the recession, according to fresh data.

The North East Chamber of Commerce’s (NECC) flagship quarterly economic report – the North East Business Barometer – shows continued slow growth in UK sales and orders but a worrying dip in the export performance of the region.

The figures for the second quarter of 2010, compiled in partnership with Barclays and released today (July 5), show that the balance of UK sales rose by 4.1 since the last quarter – up by 24.7 on a year ago – while UK orders rose by 1.8. However, export sales fell by 4.4 and orders fell by 8.9. Both indicators now lie in the red suggesting exports contracted in the second quarter.

The majority of the other indicators of economic performance were positive with the balance of companies showing growth in future workforce plans, future profitability and future turnover.

James Ramsbotham, NECC chief executive, said: “It is clear to see that the recovery is still on a knife edge and we need to see the right support channeled into keeping a strong and healthy private sector. The recovery is now in the hands of the business sector and we must do all we can to enable companies to grow and take on more staff.

“Two major factors on the horizon that will influence this growth will be the Government’s planned public sector spending cuts due to be announced in October and its plans to replace regional development agencies with local enterprise partnerships. Any planned spending cuts must take into account the knock-on effect on private sector performance and moves to replace RDAs have to reflect the need for strategic decisions affecting the regional economy to be taken here in the North East.”

The largest rise recorded for the last quarter was in training investment plans which rose by 6.2 in the second quarter of the year.

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