Manufacturing and exports will prove crucial to the North East’s economic recovery, according to high profile City analyst Roger Bootle.
Speaking to the Journal ahead of his annual address to a business dinner held by Deloitte in Newcastle yesterday, the former HSBC chief economist and founder of Capital Economics said the medium term outlook for the region was good.
“It is clear the North East has been pretty badly hit recently,” he said.
“It is picking up but only at about the same rate as the rest of the UK.
“One thing that could drag it back is the heavy weight of the public sector, but the North East is still highly exposed to manufacturing and exports, and in the medium-term that is very good news, because we need an increase in manufacturing and exports.”
Bootle’s comments came just as insolvency trade body R3 revealed research showing the region has the lowest proportion of manufacturing businesses facing serious commercial concerns in the UK.
The latest Markit/CIPS Purchasing Managers’ Index shows just under one in five (19%) are currently ’at risk’ of failure, compared to 22% throughout the whole of the country and 29% in London.
Steve Ross, chairman of R3 in the North East and a partner in the Restructuring department of the Sunderland office of RSM Tenon acountants, said: “Despite hearing many times over the years about the death of the north east manufacturing sector, it has always been a key constituent part of the regional economy, and while conditions clearly remain challenging, its resilience is very much highlighted by comparisons to other parts of the UK.”