GDP figures bring new hope for North East firms

The North East's business community has given a warm welcome to new GDP figures, providing further hope for a significant upturn in the region’s fortunes

Spending chiefs have urged the creation of a new £200m fund to help SMEs
GDP figures bring new hope for North East firms

The North East’s business community has given a warm welcome to new GDP figures, providing further hope for a significant upturn in the region’s fortunes.

Yesterday, the Office for National Statistics confirmed the UK economy had grown by 1.9% in 2013, its strongest rate since 2007, with GDP up 0.7% in the fourth quarter compared to the third.

The services sector was particularly strong in the last three months of the year, with output rising 0.8%. Agriculture likewise grew by 0.5%, industrial production by 0.7% and manufacturing by 0.9% – although construction fell by 0.3%.

The news comes on the back of many surveys, including those from the Entrepreneurs’ Forum and the North East Chamber of Commerce (NECC), suggesting the region’s businesess are seeing growing sales, profits and enthusiasm as the dark days of recession are left behind.

NECC policy and research manager, Mark Stephenson, said: “These growth figures confirm what we have seen in our own Quarterly Economic Surveys throughout 2013 and particularly in the last quarter.

“North East businesses are growing, investing in recruitment and equipment, seeing a rise in sales and orders and are increasingly bullish about their prospects.

“This growth has been driven by our businesses and the Government now has a perfect opportunity to seize the momentum and empower our companies to deliver more for UK PLC. Support must be made available to improve skills, build on the transport infrastructure projects already planned and boost inward investment support in the region.”

The comments were echoed by John Dickson, chairman and managing director of Blaydon-based civil engineering contractors Owen Pugh and chairman of the North East Civil Engineering Contractors Association, who spoke of “more robust demand which is helping build confidence”. He admitted, however, there were still challenges ahead.

Mike Odysseas, managing director of Stockton-based telecommunications business Odyssey Systems, meanwhile, said he was not surprised by the figures, having seen “real growth and recovery” for some time. David Coppock, regional director for UK Trade & Investment in the North East, likewise said more North East companies were now considering expanding internationally.

Some commentators, however, have suggested the growth has focused insufficiently on exports and excessively on the services sector and household spending. Economists have also noted that economic output is still 1.3% below its 2008 first quarter level, and that in the last quarter of 2013 GDP growth slipped down from the 0.8% seen in Q3.

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