Confidence is taking a hit

Jul 7 2008 Evening Gazette

ECONOMIC turbulence is beginning to impact on North East business performance and confidence, a new report warned today.

And soaring energy costs is becoming a key concern for firms, according to the North East Chamber of Commerce’s quarterly economic survey, the North East Business Barometer.

Worries over energy prices are the highest on record, with 87% saying they are an increasing concern.

The chamber has now written to Energy Minister, Malcolm Wicks, and the major utilities companies to voice their worries.

A series of indicators in the survey have dropped markedly since the first quarter of the year, reflecting challenging conditions around the globe.

NECC members have reported falling UK sales and orders in the second quarter of 2008. But when broken down by business type, manufacturing industries remain steady on the domestic front - and exports are continuing to grow.

Forecasts of future profitability are also down, but there remain expectations of increased employment in the next 12 months.

NECC chief executive James Ramsbotham said: “These results underline our increasing nervousness about conditions for North-east businesses, which face many of the same concerns we all do as consumers and householders.

“It is clear the Bank of England will not be able to address twin threats to growth and inflation through monetary policy alone.

“We need the Government to support our members through this difficult period and recognise the serious implications of decisions such as tax rises on fuel, or increased empty property rates.”