North-East economy shows first rays of hope (From The Advertiser Series)

North-East economy shows first rays of hope

12:55pm Thursday 9th July 2009

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THE North-East economy is inching closer to stability – but it is too soon to declare a recovery, data has revealed.

The North-East Business Barometer (Nebb) has shown the decline in domestic sales slowing and firms are more positive about plant investment and staff retention.

The report, which surveys the 4,000 members of the North-East Chamber of Commerce (Necc) also shows respondents are much more confident that turnover and profitability will improve over the next 12 months.

However, Nebb highlights concerns among the private sector that the level of Government borrowing will lead to tax rises.

James Ramsbotham, Necc chief executive, said: “Overall, our survey demonstrates increasing levels of confidence among businesses but this is more a case of companies being more confident of survival rather than being outright optimistic.

We are most definitely not out of the woods yet.

“The economy is still contracting but the Nebb shows that the balance is starting to swing back towards equilibrium.

“However, this ray of hope is set against a backdrop of the dark clouds that hang over the UK economy due to the staggering levels of public debt. The Government will have to reduce that debt over the coming months and years and it will face frighteningly tough decisions.

“What cannot be allowed to happen is for the bill to be dropped in the lap of businesses.

The focus must be on setting out realistic priorities for public spending as opposed to damaging the private sector through excessive increases in taxation.”

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