AN IMPORTANT bellwether of the North-East economy has reported its best results for almost 20 years.
The region’s largest quarterly business survey, produced by the North East Chamber of Commerce (NECC), reveals rises in investment plans, and signs of a jobs boom.
Today’s results are the highest overall scores recorded by any QES since the survey began in 1995.
Optimism across the region continues to rise as firms delivered another boost for the regional economy following strong results in the last two quarters. The upward trend in trade with domestic and foreign markets reported in the first three months of the year has continued, suggesting the recovery is starting to take hold across the region's businesses.
Having charted slow but steady growth across most indicators throughout 2013, the last quarter of that year returned the best set of results since 2003. Today’s figures demonstrate a continuing positive trend.
The QES is a survey that shows the health and direction of the North-East economy. Measured across 11 indicators, any score above zero indicates trading conditions are improving.
Across all indicators, year-on-year scores are positive, with the only exceptions being cashflow and export orders.
Mark Stephenson, NECC Policy and Research Manager, said: “We are starting to see a real trend developing across both manufacturing and service sectors. The slow but steady growth throughout 2013 has provided the momentum for an excellent first half of 2014, which is seeing rising optimism across the region reflected in future plans for recruitment and business investment.
“In particular, this quarter has seen respondents send an incredibly positive message on future recruitment. Over 60% of firms had attempted to recruit full time staff, which is comfortably higher than last quarter (53.8%) and considerably above last year’s figure (45.7%) which is a clear statement of confidence and highly encouraging.
“The broader picture is also very positive and the figures for investment in both plant and training are easily the highest since the recession. Given the contraction in the cashflow score, which is somewhat at odds with the investment scores, it is worth speculating what is driving cashflow pressures. Are businesses choosing to invest limited cash, or is this a wider problem arising from time to pay issues or other general issues?”
“Taken against last year’s figures, expectations are markedly stronger. Businesses are looking to hire and the region is very much open for business.”
NECC President, David Laws, said: “The strong positivity that fed through from the manufacturing sector in the first quarter of this year was very noticeable and has continued this quarter, albeit it has been more than matched by feedback from the service sector which is hugely welcome.
“The North-East labour market continues to grow, albeit with our unemployment rate remaining the highest in the UK. However, the rate of increase in the North East employment figure is the highest in the UK in sectors as varied as biologics, pharmaceuticals, automotive, oil and gas – to name but a few.”
Seaward, based in Peterlee, is a world leading designer and manufacturer of electrical safety and performance test solutions. The company has seen large growth over the past financial year with sales of over £15m, which looks set to continue with a very strong performance in the first quarter of its new financial year.
Mark Marsh, Group Financial Director, said: “Our growth is down to a strong focus on developing innovative, world-leading products for the international market, with export sales making up almost 50% of the company's output. In addition, the company recently opened an office in Malaysia to handle Asia Pacific growth potential, and we’ve taken on more staff in the Tampa office to further develop the North American market.
“The company is determined to invest in its design, manufacture and administration in Peterlee and has recently opened a new commercial centre, highlighting its ongoing commitment to the area.”