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North East Chamber of Commerce column
6:00am Wednesday 9th April 2014 in Business
By Mark Stephenson, NECC policy and research manager
2014 has started with a bang for North-East businesses.
The confidence which returned last year is spreading. We are not talking of green shoots any more, but something much more promising.
So call it what you will, a stem, leaves, blossom; take your pick.
The North-East economy is growing and with it jobs and prosperity.
The North East Chamber of Commerce (NECC) Quarterly Economic Survey demonstrates this.
Yet more records have been attained on our scores for exporting and for activity within the manufacturing sector.
Likewise, growth and optimism are spread across many sectors within businesses of all sizes.
This isn’t to say there are not challenges.
NECC members are reporting wage as well as other cost pressures, which must be addressed if the recovery is to be sustainable.
Nobody wants another debt-led boom.
Businesses seem to be responding to this because their projections for future profitability and turnover have dipped since the previous quarter, perhaps a reflection of the fact many are now pricing in wage growth and the needs of their workforce within their plans.
The dip in some of the key indicators compared to the previous quarter was perhaps to be expected owing to the particularly strong feedback that was received in our previous survey.
Placing these into the context of the annual comparison illustrates that underlying growth is still very strong and that, looking back 12 months, North-East businesses have come a long way.
Likewise, intentions for plant investment continue to be modest.
Nevertheless, with the introduction of measures in the March Budget such as a doubling of the Annual Investment Allowance, ending in 2015, we may see this figure pick up in coming quarters.
So there are caveats to the confidence we are seeing. Politicians and policy can be used to great effect here.
The Budget is a case in point, but while policy can expedite growth, it can also hinder it if applied inadvisedly.
During the remainder of 2014, NECC will not miss an opportunity to identify and fight for priorities that help our businesses provide yet more wealth and jobs for more people in this region.
Greater certainty for our energy intensive industries, better infrastructure, a modernisation in the way we equip and skill our workforce, reduced red tape and a pro-business mentality from decision makers whether they are based locally or in Whitehall.
Achieving this will be tough, but if we do it then we will have cultivated something far greater than green shoots.