MOST small firms in the North East do not expect the economy to recover for at least another two years, despite last week’s statistics that the UK officially came out of recession in the final quarter of 2009.
A long, drawn out downturn with continued difficult trading conditions were the worrying headlines for the region from the latest Bibby Financial Services Business Factors Index.
The study said 61% of North East firms thought it would be at least another two years before the economy recovered, while 30% believed it could be three years or more.
Nationally, 71% of businesses said they expected to see economic recovery within a year.
The grim regional predictions were reinforced by figures suggesting 31% of North East businesses were only just managing to survive in the current tough environment.
The report said its findings suggested that economic conditions in the region were worse than many commentators believed.
Just 6% of the North East businesses quizzed for the report said trading conditions were now better than a year ago, down from 8% in Bibby’s previous report. However, almost seven in 10 had attracted new customers, while 36% had an increase in orders.
Bibby’s North East spokesman, Graham Cooper, said: “Firms in the North East, with many involved in manufacturing, have had a tough time during the recession and, while we don’t expect a recovery overnight, it is clear that many businesses have experienced a difficult few months since our last Index.
“Although 2010 has already provided a number of challenges for firms within the region, such as the adverse weather, a weak pound is fuelling export growth and consumer confidence is slowly rising. Looking forward, prospects for recovery are beginning to improve.”
