NORTH-East businesses are investing more than at any time since the start of the recession, according to figures from a new industry survey.

The North East Chamber of Commerce (NECC) said its Quarterly Economic Survey (QES) showed that businesses are starting 2013 with greater confidence but warned that problems with cashflow and rising energy costs are holding back some manufacturing firms.

The latest QES, a trends survey that shows the health and direction of the North-East economy, shows a significant rise in the number of companies increasing their staff levels and investing in new machinery and equipment.

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However, the survey also shows that despite slight improvements in both domestic and export sales, orders dropped in the second half of 2012.

NECC director of policy, Ross Smith, said: “There is a marked increase in results for investment plans. Despite sales and orders looking a little weaker, businesses are reporting investment plans growing more quickly than at any point since before the recession began.

“We shouldn’t read too much into one quarter’s figures after such a prolonged period of weak investment. But we know a number of businesses have decided they cannot put off investment in vital equipment and machinery any longer.

“If businesses are starting 2013 with greater confidence to invest, and greater confidence they will secure the funding to do so, that must bode well for the year ahead.”

The QES also shows that the region’s service sector has continued to outpace the manufacturing industry in recent months, with cashflow and energy costs stifling growth.

The NECC has highlighted the work of the Lanchester Group, based in Annfield Plain, in County Durham, as a company that invested in both its machinery and workforce in 2012, creating 100 new jobs.

Tony Cleary, managing director of the group, which includes Lanchester Wine Cellars, Lanchester Wine Sales, Greencroft Bottling, Lanchester Gifts and Lanchester Energy Company, said: “We have always left the money in the business and that’s why we are still here – it’s all about leaving the money in, making the business stronger and employing more local people.

“We are committed to ongoing investment to constantly upgrade the infrastructure, efficiencies and quality of the facility and its operation and to improve customer service.”