Business leaders in the North East have welcomed the fastest growth in the economy in three years - but warned that more still needs to be done.
Chancellor George Osborne claimed Britain was “on the path to prosperity” as official figures showed the economy grew by 0.8% in the third quarter of this year.
That growth was the best performance since the second quarter of 2010, including a 2.5% surge in the construction sector - which has been bolstered by Government initiatives such as Help to Buy.
It is also the first time in three years that growth has improved for three quarters in succession, figures from the Office for National Statistics showed.
However, the size of the economy remains 2.5% off the pre-recession peak of early 2008 and there were warnings that the pace of growth could start to tail off.
Yesterday James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “The North East boasts some of the best parts of the economy with our enviable manufacturing and engineering output and excellent export performance. We also have a wealth of creative and high-tech businesses creating a major buzz within their own sectors.
“NECC’s own Quarterly Economic Survey reflects the optimism in this report, with members reporting a willingness to invest in their companies and workforces more than at any time since the beginning of the recession.
“They’re also reporting significant rises in sales and orders both domestically and overseas.
“However, the economy is still not as healthy as it was in 2008 and there is still a great deal of work yet to be done.
“The Government’s pledge to begin major investment in an ambitious infrastructure programme is a start and NECC will continue to lobby for more backing of North East business.
“We are optimistic that our regional economy has turned the corner, but we must remain focused on stimulating sustained growth and prosperity across the region.”
Bank of England governor Mark Carney yesterday warned that growth was weighted heavily towards the household sector while investment and exports were lagging behind.
But he acknowledged that the rate of growth was “towards the top end of the advanced economies”.
Prime Minister David Cameron tweeted yesterday: “Today’s encouraging £GDP growth figures are another sign we are turning a corner.”
But Business Secretary Vince Cable chose a cautious metaphor and insisted more still needed to be done to address lack of bank lending.
He said: “We’ve always said the road to recovery would be a marathon, not a sprint.”
Shadow chancellor Ed Balls said: “For millions of people across the country still seeing prices rising faster than their wages this is no recovery at all.”
The new figures showed the economy grew by 1.5% over the last year, an improvement on the year-to-year rise of 1.3% in the second quarter. The International Monetary Fund is predicting full-year growth of 1.4% for 2013.
Third quarter GDP growth of 0.8% builds on a 0.7% upturn in the previous period and a 0.4% figure at the start of the year.
The latest improvement included a strong contribution from construction, which has been bolstered by Government schemes such as Help to Buy - an initiative which recently saw its new mortgage guarantee phase launched.
There were increases in new work on private housing and private commercial building as well as domestic repairs and maintenance.
However, the construction sector is still 12.5% behind its pre-crisis peak.
Production grew 0.5%, though this would have been better but for a significant fall in gas output and electricity demand that acted as a drag on GDP as a whole.
Production was 12.8% off the 2008 peak.