member of necc logo large print versionThe North East Chamber of Commerce (NECC) has found North East businesses have bounced back strongly from a disappointing end to 2015, with a robust performance in the first quarter of 2016.

Findings from the NECC, the region’s largest business membership organisation, have been released in its latest Quarterly Economic Survey (QES).    Among the key findings are a strong improvement in domestic markets with scores for sales and orders well above those from the last quarter.

Mike Matthews, President, NECC and Managing Director, Nifco (UK) said: “I am delighted to say the survey has shown a strong improvement in performance among NECC members after a difficult period in late 2015.  This fact reflects the innovation, expertise and determination I see as I meet businesses around our region.  In particular, it is good to see increased investment, even in challenging times, and the continued strong growth in the workforce score.”

The biggest concerns reported in the QES are export sales flatlining, concerns over cashflow and many businesses struggling to maintain prices. There is also a marked difference in the performance pattern of both the manufacturing and service sectors.  The former is seeing some recovery in export markets but a decline in domestic orders and sales.  For the region’s service companies the findings are reversed, with less buoyant export sales.

Ross Smith, Director of Policy, NECC said: “The first survey of this year is still slightly down on the levels seen over the last two years, but represents a solid level of growth.  I am pleased to report domestic markets have seen a strong improvement, with scores for sales and orders well above those from last quarter. However we do need to ensure our international trade is safeguarded as the export sales score has dropped even lower and is now only marginally in growth territory.”

Simon Wake, Partner, Endeavour Partnership LLP said: “The findings of the QES reflect the activity we are seeing from our clients. There is a lot of business being carried out and many firms are seeking expansion space, or looking to acquire businesses in order to grow. It is a very busy time for us and fortunately the general picture in relation to cashflow is not mirrored in our business, where we have recently taken active steps to improve cash collection and this is now seeing positive results.”

Wendy Benson, Director of Sales and Marketing, Seaham Hall said: “Our business development echoes these findings. We have invested £3m in the last two years and are continuing to do so with on-going bedroom refurbishment. We are finding our business is growing in every area including average room rate and occupancy levels.  We are noticing the length of stay has increased with the average stay now around 2.5 nights, up from 1.5. The spa element is also very buoyant , in particular  the corporate leisure market, where companies are treating their employees to a spa day as a reward.  To encourage our growth we have a very successful profit share scheme where 40 per cent of our profits are shared equally between all 138 staff. This is working very well for us.”

The QES survey showed the cashflow situation for businesses continued to worsen overall, with the score in negative territory and improving only slightly from Q4 2015. Many businesses had struggled to maintain their prices, with this indicator weakening since the previous quarter.

Karen Race, Deputy Director of The Forge, Teesside University’s business hub, said: “We work closely with many different companies, across multiple sectors, to try and find ways to help them develop. It’s great to see the ambition and innovation that we see every day paying off.

“At the University, we are also optimistic about our future, having invested in our new £30m Campus Heart which brings the total spending on our estate up to £260 million in recent years.”

More positive results were in the survey’s employment figures for both the service and manufacturing sectors.  There was a slight reduction in the number of firms hiring over the quarter.  This continued strong growth has been reflected in official labour market statistics.  There has also been an improvement in scores for both plant and training investment.