BUSINESS confidence is on the increase in the North East, despite the downturn in the economy in the first quarter of the year.
The first of a raft of economic surveys this week show that companies are undeterred by predictions of a double-dip recession and expect to grow and recruit more staff this year.
The North East Chamber of Commerce’s (NECC) Quarterly Economic Survey released on Friday found that firms have seen increases in both UK and export sales and orders, business investment, workforce levels and future profitability.
It also shows once again that the region continues to perform well in overseas markets, but that UK sales are improving and there is a significant improvement in performance from the service sector.
NECC’s Quarterly Economic Survey (QES), produced in partnership with Barclays, is the region’s largest survey of its kind, based on responses from 386 companies.
It found that the gap between growth in manufacturing and service sectors has started to close and that sales and orders are up on the last quarter of 2011 and the same period a year ago.
NECC chief executive, James Ramsbotham, said: “This survey has provided us with a welcome dose of positivity and optimism for the year ahead.
“This is the first time we have seen such positive indicators in the QES since before the recession took hold in 2008, and show a marked upturn on the weak and imbalanced growth seen throughout 2010 and 2011.
“While the continued excellent performance of the region’s manufacturers and exporters must be applauded, it’s reassuring to see our service sector coming back strongly after a tough 12 months. At a time when the Government is revising down its growth forecast, this survey indicates that, while the region is still to fully recover from the economic downturn, our businesses have experienced a positive start to 2012.
“It would be naïve to suggest these figures signal the beginning of a significant upturn.”
And the CBI/PWC Financial Services Survey, also out on Friday, said the volume of business in the sector grew in the first three months of 2012 at well above the average for the eighth quarter running.
This growth is reflected in the first rise in optimism among financial services firms in a year, and an unexpected increase in employment in the sector. Companies also plan to invest more in IT over the next year.