North East economy shows signs of recovery as sales grow

Figures released today by the North East Chamber of Commerce show that the region is bouncing back from the economic downturn

Shoppers on Northumberland Street in Newcastle
Shoppers on Northumberland Street in Newcastle

The region is “bouncing back” from the economic downturn as businesses report a boom in sales, orders and recruitment, a report claims.

Figures released today by the North East Chamber of Commerce (NECC) show a 100% increase in the region’s UK sales since the last quarter as well as a rise in export orders and cash flow.

The positive levels of growth are better than at any other time since 2008, with the region’s gains overshadowing those made in the Tees Valley LEP for the first time in 18 months.

Despite the economic buoyancy, results from the NECC’s Quarterly Economic Report show businesses have struggled to maintain prices and experts warn that the uncertain future of the Eurozone could “de-rail” recovery.

The NECC’s Director of Policy, Ross Smith, said: “These results suggest that the North East is bouncing back from the economic downturn and that it is our businesses that are leading the way.

“This report contains the best scores on sales, orders, workforce and investment since 2008. At different times during the past five years either manufacturing or services has been strong, but rarely both at the same time.”

Employment levels and future recruitment aims are also at a five-year high and there are positive figures in plant and training investment plans.

UK orders in both the manufacturing and service sectors are currently enjoying similar levels of growth despite prices in manufacturing dropping since the last quarter. Mr Smith added: “Manufacturers are struggling to maintain prices which could hit profitability especially at a time when energy costs are still high and there is pressure on raw materials.”

The survey – conducted between April and June – asked 330 businesses to outline areas of positive and negative growth as well as future economic forecasts. Despite there being one very positive quarter at the start of 2012, the region’s economic performance tailed off.

With good levels of growth now maintained for two consecutive quarters in 2013, businesses are celebrating their delicate climb out of recession.

Paul Ryan, UK Manager of Jordan Valley Semiconductors based in Belmont, County Durham, who took part in the survey, said the last 12 months has seen an increase in their export orders.

Mr Ryan, whose business makes X-ray machines, said: “The last 12 months have seen a slow but steady increase in export orders for our X-ray systems, with signs cautiously optimistic for the foreseeable future. There are signs that confidence is returning to invest in capital equipment, with some significant orders placed in the last three months, and more expected to follow in the near future. This is allowing us to grow both in revenues and in people.”

The region out-performed the Tees Valley LEP in UK sales, export orders and plant investment and future profitability however with the two regions only recently compared by the NECC, analysts are unsure the results are indicative of long-term regional trends.

Mr Smith added: “In an incredibly positive reflection of North East business, the real positive is the sustained optimism from Quarter 1 and the genuine signs that businesses are ready to start growing.

“It still seems there are many uncertainties – not least the future of the Eurozone – which have potential to derail any recovery, but it’s clear that performance is strengthening and confidence returning, which can only be very welcome news.”


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer