NORTH-EAST companies are reporting the most positive signs of recovery for more than a decade, the region’s largest business survey has revealed, boosting hopes that the worst of the recession is behind us.

Published today, the North East Chamber of Commerce's Quarterly Economic Survey shows that firms are set to recruit more workers, win orders and invest for future success.

It follows bullish comments by NECC president Dave Laws that 2014 will be a year of growth.

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However, a further £25bn spending cuts will be needed after the next election, Chancellor George Osborne has warned.

He suggested making welfare savings by cutting housing benefit for under-25s and restricting council housing for those earning over £65,000 a year.

His comments about future cuts comes as he will warn today of a "year of hard truths" in a speech in Birmingham.

Having shown signs of steady progress during 2013, the NECC's final quarter's QES returned the best set of results since 2003, also demonstrating that confidence levels in future performance rank alongside the highest scores seen in the 14-year history of the survey, with significant growth in the recruitment of workers.

The surprising upsurge in confidence comes as the region is blighted by some of the highest unemployment rates in the UK, and spending cuts continue to threaten jobs and services. 

Produced in partnership with Barclays, the QES shows the health and direction of the North-East economy. Measured across 11 indicators, any score above zero indicates trading conditions are improving.

Scores are significantly better than a year ago, and results for domestic sales and workforce are at their highest levels since the NECC was formed in 1995.

NECC director of policy, Ross Smith, said: "We have ended the year on a real high.

"The North-East is fighting back and our businesses are leading the recovery. It is vital that we build on this upsurge in optimism in 2014 and continue the positive trend.

"For the past two years we have been calling on the Government to empower the North-East to deliver more for UK Plc and these figures prove
"The economic conditions have been far from ideal, yet we have seen the region close the gap on the rest of the UK in our output - next year we must lobby the Government to match the ambitions of our businesses and continue to grow our economy."

Tees Valley companies which took part in the survey reported significantly higher scores than firms in the north of the region on key indicators such as recruitment, UK orders and investment in training.

Businesses linked to the oil and gas supply chains and business services performed particularly well, and the leisure sector also rallied in the last quarter.

Mr Smith added: "A real positive we can take from these excellent results is that this impressive performance appears broad based. Manufacturing and services are growing strongly. Likewise, in both Local Enterprise Partnership areas, we are also seeing strong balances.

"Following on from December's news that North-East GVA (gross value added) growth is outstripping the majority of the country, this QES represents another significant shot in the arm for the region's business community.

"Scores represent pace of improvement rather than absolute performance and as a business survey, the QES does not reflect regional economic performance as a whole. Nevertheless, it is the largest business survey in the region and scores have steadily increased throughout 2013 - there is much to be upbeat about at the end of 2013."

Brian Foreman, Head of North East Mid-Corporate Banking Team for Barclays, said: "The extent of the positivity reflected in the QES is perhaps slightly surprising but it does reflect a strong year for business and augurs well for 2014.

"Much of the growth is driven by domestic markets, however I expect export markets to see stronger growth in the future as other economies recover. Recently we've seen good statistics from the US and some European markets are rebounding too. Firms need to grab these opportunities over the coming months.

"People are clearly going into 2014 with levels of confidence we haven't seen for some time and hopefully this report will fuel it further. Whether growth stays as strong remains to be seen, but even more of the same would represent a very good performance."

Brian Manning, chief executive of County Durham construction company Esh Group, said: "Turnover and margin across our diverse construction activities has improved as the year moved on with the final quarter ending in a flourish. This ensured a Christmas bonus for our staff and an improved dividend in the new year for our shareholders many of whom are employees.

"As a regional business this money will no doubt find its way into the local economies of the North-East, Cumbria and Yorkshire where we work.

"We are now really looking forward to 2014 and building upon the success of 2013."