'Positive outlook for business according to NECC report

Manufacturing growth has sparked an increase in sales and orders in 2013 according to the latest NECC report.

The Quarterly Economic Survey (QES) published by the North East Chamber of Commerce shows that figures have increased in the first quarter of this year both in the UK and exports.

The findings also show that manufacturing growth has bounced back to the levels of early 2012, after being previously overtaken by the service sector in quarters three and four.

These new figures represent a new positivity for North East business and reflect the optimism seen at the beginning of 2012 as the number of companises increasing staffing levels continues into 2013.

NECC Director of Policy, Ross Smith, said: “The first half of 2012 saw the biggest rise in business positivity since 2008, but that slowed in the second half of the year as manufacturing growth and export orders impacted slightly on regional optimism.

“However, it is good to see that the first set of QES results this year has brought a renewed positivity with this welcome boost to sales and orders.

“While I appreciate 2013 will be another tough year the outlook now seems much more positive.”

The QES is produced in partnership with Barclays and measures the health and direction of the North East economy.

Measured across 11 indicators, any score above zero shows that trading conditions are improving.

Almost all of the indicators in the most recent QES were positive with the majority showing improvement from the end of 2012.

While sales and orders have not reached the peak seen in early 2012, manufacturing’s strong rebound was expected as demand from emerging economies strengthened and exchange rates became more favourable.

Mr Smith said: “While our manufacturing performance is a real headline of this QES it is also good to see sustained growth across the service sector after a long period of effective stagnation.

“Service sector scores are still well into positive territory and it is clear the North East is no longer reliant on one sector alone for its recovery.

“The recovery of investment plans is also maintained, with high scores for the manufacturing sector particularly encouraging.

“There has only been one quarter where the plant investment score for manufacturers has been higher since the onset of recession in 2008, and that represented a rebound rather than sustained growth.

“However, it must be remembered that any growth is from a low base after four years of muted investment, scores are still some way from the levels seen prior to 2008, there is an element of rebound from weak Q4 figures and the first quarter of 2012 showed a strong set of scores which were not maintained.

“Nevertheless, this is still an encouraging picture and will be even more so if it extends to Q2.

“Overall the survey shows that pre-recession growth is some way off, though some individual firms are seeing significant success.

“But confidence continues to creep back and this always a good sign.”

The Quarter 1 QES, includes a comparison between Local Enterprise Partnership areas and the indicators demonstrate that businesses in the North of the region have more robust UK sales and orders, while the South is ahead on exports.

Chris Rigg, North East Team Director for Barclays, said: “The survey shows a positive start to the year, with encouraging results for the quarter providing hope for businesses across the North East.

“Results on a range of indicators are picking up after a less buoyant Quarter 4 in 2012 and this broadly mirrors the activity we are seeing at Barclays, which has been more upbeat since the start of the year with greater levels of engagement from businesses in the region.

“Oil and gas remains a sector with plenty of activity, while at the other end of the scale, high street retail is still very challenging.

“But we are seeing a general uptick across nearly all sectors and it’s good to see a strong performance in job creation – which also mirrors some research we recently conducted across the region.”