THE North-East could lose up to 14 years of growth because of the economic impact of the pandemic, analysis has revealed.

Research by small business lender iwoca revealed the North-East could lose up to 14 years worth of growth due to the financial hit created by the Covid-19 pandemic.

The region has been forecast to lose 11.7 per cent of GVA in 2020 and analysis of previous years' GDP statistics suggests this fall would erase the North-East's economic growth made between 2004 and 2018.

London, by comparison, is estimated to lose four years of growth.

Businesses in the North-East could also be more vulnerable due to the high percentage of those in the worst hit sectors.

The ONS identified the two sectors, ‘accommodation and food services’ and ‘arts, entertainment, recreation and other services’ as being the two worst affected between January and July, with these impacted by further local lockdowns and the second England-wide lockdown.

Some 16.4 per cent of all businesses in the North-East fall within these two sectors, which is the highest proportion out of English regions.

This suggests the business community may be harder hit than elsewhere in the country.

According to HMRC, these sectors have also seen the highest proportion of jobs furloughed.

In the arts, entertainment and recreation sector, 45 per cent of employees were on the furlough scheme at the end of July, and 43 per cent of workers in accommodation and food services were furloughed.

ONS data also shows that the North-East had the highest unemployment rate in the country of 6.6 per cent in August 2020, above the national average of 4.5 per cent.

Tees Valley Mayor Ben Houchen, recognising these challenges, has launched various schemes and packages to support businesses and keep the economy on track during the crisis.

Mr Houchen said: “Throughout the coronavirus pandemic, I have made it my absolute priority to support businesses and jobs in Teesside, Darlington and Hartlepool, and make sure we all get through this extremely difficult time.

“This remains a challenging time for everyone, but I am doing everything I can locally to help people and businesses get through it and allow us to come out the other side safely and in a strong position for the future.

“Arts and entertainment venues have clearly been amongst the most affected. That’s why, last month, I launched our Cultural Development and Innovation Fund, providing Businesses focused on visual or performing arts, heritage, film and tv, music or literature grants of up to £25,000.

“I’m also continuing to support and create jobs for local people despite the difficulties businesses are facing.

“My Emergency Apprenticeship Fund has already created 100 new apprentices for youngsters aged between 16 and 20, and we are set to smash our target of creating 500 jobs for young people through the Government’s Kickstart scheme.

“And only this week, we’ve improved our Buy Local Tees Valley scheme to make local people aware of the fantastic businesses still operating this Christmas, so people in Teesside, Darlington and Hartlepool can shop local and support local during the festive season."

The analysis comes as iwoca pledges to lend £220 million to small businesses in the North by the end of 2023 to help them recover from the pandemic.

Christoph Rieche, chief executive of the firm said: “Small businesses around the country have been hit hard by the pandemic, but it’s clear that some parts of the country - including the North East - are particularly suffering. We want to support business owners in these hard-hit areas to give them the best chance of recovery over the next few years.

“With this financial commitment we hope that we can drive up growth and help businesses in the North East thrive.”