Success breeds optimism in North

May 6 2008 by Graeme King, The Journal

MANUFACTURERS in the North East are bucking the national trend by creating jobs and achieving growth.

The positive outlook has been welcomed by business leaders as an indication some sectors are countering the gloom being felt elsewhere.

While the worsening economic outlook has dented manufacturers’ confidence in most UK regions in the past three months, the CBI’s Regional Trends Survey shows the North East has been creating jobs and expects more in the next quarter.

This is particularly welcome after it emerged late last year that the region has lost 58,000 manufacturing jobs since the turn of the century and jobs in the sector have fallen to 140,000.

CBI North East director Sarah Green said: “While business confidence in the North East is declining in line with UK confidence, the reported figures from the region’s manufacturers buck the national trend with employment on the increase and no material change in total orders.

“This suggests that while the real economy is holding up, there is a danger that we may talk ourselves into a recession as perception is currently far worse than reality.

“It is critical that manufacturers continue to invest in plant and machinery – which the region’s businesses are planning to do.” Dennis Henderson, managing director of Pressex – part of North East Business Awards finalist Responsive Engineering, agreed with the survey’s findings.

He said: “We have enjoyed good growth in the last financial year and we are anticipating good growth in the next one.”

Regional director of manufacturing organisation EEF Alan Hall said: “The manufacturing sector is still in a very healthy state. It is very strongly export led, as was highlighted at the North East Business Awards last Thursday night.

“There are some situations where margins have been opened up by exchange rates. While there is a squeeze on the dollar, trading with the euro is good, which is helping some companies better handle the rising cost of fuel and energy.”

One NorthEast chief executive Alan Clarke said: “Given the well reported fluctuations in the global economy, it is pleasing to see that the North East is bucking the trend for employment.”

The CBI survey reported an estimated 18,000 manufacturing jobs would be lost in the second quarter, mainly in the South East and London, South West and East of England. Rising fuel cost was cited as a reason for pessimism.

CBI head of economics analysis Lai Wah Co said: “The slowdown under way in other parts of the economy is now being felt in the manufacturing sector. Look under the bonnet, however, and you’ll see some marked regional differences.” In the North East a balance of +18% have been recruiting, and +13% intend to hire soon.