The North East economy is showing some warning signals of a slow down ahead of a potentially turbulent year.
The findings for Quarter 4 are published today (Wednesday 4 January 2017) in the North East England Chamber of Commerce’s Quarterly Economic Survey.
Scores have dropped across a series of key indicators, including domestic sales and workforce, illustrating slower growth rates.
And the score for export sales has turned negative, showing a fall during the quarter – although the picture is more positive for the manufacturing sector.
With negotiations due to start over leaving the EU, big decisions due in the region over devolution, and a new US President bringing potential changes to international markets, the Chamber has warned that decision-makers must be careful to protect growth.
Mike Matthews, Chamber President and managing director, Nifco (UK) said:
“It is vital that Government listens to businesses’ concerns, and goes into this next period with an absolute commitment to maintain confidence and competitiveness in our economy. Local leaders must also do everything to ensure our business conditions in this region are as strong as possible – the onset of devolution in Tees Valley gives a perfect opportunity to ensure this happens.
“Our members have delivered significant growth in 2016, not least in employment, and our region can’t afford to let that slip in the year ahead.”
Linda Landles, director of Chamber member, Bluegrass Research, a Gateshead-based marketing research consultancy, specialising in market and social research, said: We are just entering our 9th year of business and 2016 was one of the strongest years so far. There certainly seemed to be a good range of market research projects being commissioned and our turnover has grown quite significantly; we’ve won contracts in the north east and across the UK, a good mix of repeat business and new clients. This has enabled us to bring new people into the business, strengthening our offer. Despite uncertainty in the wider economy, we are upbeat about the year ahead. Our ultimate aim is to sustain our recent growth, but are also hopeful that, as clients strive to maintain their competitive positions with strong and relevant marketing, there will be opportunity for further expansion.”
The report highlights issues of growing concern for businesses are inflation and exchange rates.
On an optimistic note the results show some positive changes over the last three months. The plant investment score, which was flat after the EU referendum, has risen, suggesting the pause in investment may be lifting. And while export scores overall are disappointingly negative for the first time in six years, manufacturing export scores have actually recovered – perhaps in part thanks to the fall in value of sterling. Expectations of turnover and profitability for the year ahead remain relatively strong and above average level in the Chamber survey’s 21-year history.