North East can look to manufacturing in an upturn

Sep 23 2009 By The Journal

TOP economist Roger Bootle held out a beacon of light for the North East economy by predicting the region may perform better than the rest of the country on the back of its strong manufacturing base.

Mr Bootle, who was speaking at a business dinner in Jesmond last night organised by accountancy firm Deloitte, believes Sterling’s depressed value is set to boost UK exporters.

He said: "For once the North East is set to benefit from its high concentration of manufacturing exporters as this is a part of the economy that is set to do well in relation to the rest."

However Mr Bootle was pessimistic about the economy going forward, saying the current recovery was based on artificial foundations – namely huge amounts of global Government cash.

He also said that after last year’s massive destocking exercise the partial recovery we are now witnessing is partly due to business restocking.

Large scale fiscal tightening following next year’s General Election -– no matter which Government is in power – will depress economic activity next year.

On inflation he said: "There is next to no chance of inflation and there are serious dangers that we could face a period of deflation."

He went on to say he believed that house prices had further to fall.

As well as being economic adviser to Deloitte, Mr Bootle is also managing director of Capital Economics, a specialist advisor to the House of Commons Treasury Committee and an Honorary Fellow of the Institute of Actuaries.