Partner Article

North East defies gloomy outlook

The North East economy ended 2007 on a high, eclipsing the despondent economic news at a national level, according to new data. The North East Chamber of Commerce’s quarterly economic survey, the North East Business Barometer, showed strong growth in the region with UK sales and orders rising sharply in the Quarter 4 of last year.

Export activity also improved as businesses in the region reversed the difficult times in the third quarter of 2007. Despite facing some difficult trading conditions including increased oil and food prices and a strong pound the outlook for companies was much brighter. This was reflected by the news that more respondents than before were predicting an increase in forecast turnover.

However, there was evidence that some firms were absorbing inflationary pressures with profitability falling. There will be concerns that North East businesses will need to pass on increased prices to consumers in the future if this continues to ensure that future profitability remains robust. Respondents to the survey cited rising energy prices and increased taxation as being a worry in the coming months.

Ross Smith, NECC head of policy, said: “Given the gloomy and despondent predictions there have been in recent weeks, this is a remarkable performance by NECC members. It demonstrates the underlying strength in North East businesses which will help them ride out fluctuations in the global economy. “We are undoubtedly facing a difficult period but the optimism that has existed in the region in recent years appears to be bolstering confidence and firms are bullish about what the future holds.”

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