Uncertainty breeds growth fears
THERE are concerns that the region’s stronger than expected growth and business confidence rates will be hit by fears over impending public sector cuts.
PricewaterhouseCoopers’ (PwC) latest Regional Trends report found that growth rates had either improved or remained unchanged across the UK regions since before the General Election.
But Paul Woolston, senior partner at PwC in Newcastle, said: “There is certainly some way to go before regionally-based businesses resurface from the recession.
“The impact of public sector spending cuts is looming and many regional businesses have braced themselves for the worst. Property and construction remain sectors of particular concern in most regions, but all is not lost as businesses increasingly explore new market opportunities.”
The PwC report for the North East said that business confidence was average in the three months to July. Modest growth was driven by exports, with oil and gas, particularly, picking up.
But Bill MacLeod, assurance partner at PwC in Newcastle, said the big concern was now how badly the public sector would be hit by cuts.
“Up to 50% of the North East GDP is driven by the public sector,” he said.
“We would welcome more clarity on the proposals for this region, regional policy and aid generally.”
