The UK could be heading back into recession following worse-than-expected growth figures. Stuart Arnold assesses the economic picture in the North-East and finds there is room for optimism.

THIS week it was revealed that the UK economy shrank more than expected at the end of last year, based on an estimated 0.2 per cent fall in gross domestic product (GDP).

GDP is the value of all goods and services produced and is regarded as a crucial indicator for a country’s economic health and, consequently, people’s standard of living.

The peformance – the first time the economy has shrunk since the final quarter of 2010 – led to a raft of gloomy predictions and raised fresh fears of a socalled “double-dip” recession.

It is not all doom and gloom however, depending on who you speak to, and there remain some positive signs here in the North-East.

The region continues to perform strongly when it comes to manufacturing and exports, a factor in GDP, in contrast to some other parts of the country.

David Coppock, who is the regional director of UK Trade and Investment – whose aim it is to help companies succeed in the worldwide market place – says the region is exporting £12.5bn worth of manufactured goods abroad every year.

In total, £9bn worth of goods are imported into the region – meaning it is a net exporter of goods to the tune of £3.5bn every year.

The major driving force behind the region’s export success is Japanese car manufacturer Nissan, which accounts for nearly £5bn in export revenue alone. The next biggest exporter is pharmaceuticals, which sends goods worth more than £2bn abroad.

Mr Coppock said: “The North-East has been a net exporter for four or five years.

What this demonstrates is that North-East companies are winning overseas revenue and bringing it back into the UK.

“We have companies in the North-East who can compete in the global landscape. Their ability to learn as an organisation and their people skills develop faster because they are operating in an international environment.

“So, there are a number of benefits coming back into the North-East economy.”

Mr Coppock, who wants to boost the number of North- East regular exporters from 2,500 to 3,000 and has issued a challenge to businesses to this effect, said: “The Government is dealing with a difficult situation, which is impacted by global events, and it is more important than ever that we go out and win business overseas and we welcome international companies to the region.

“The UK is still a positive place to invest in. We have accompanied companies on trade missions overseas and they are winning business.

“Sometimes you have to look beyond the headline figures.”

Geoff Turnbull, chairman of Peterlee-based engineering firm GT Group, said too much store can be set by national economic indicators, which do not always reflect what is happening locally.

He said: “In the case of the North-East, the region is making a substantial contribution to the UK’s economic wellbeing as we export more than we import.

“GT Group is a factor in the North-East’s overseas sales success story as we export to 60 countries throughout the world. This includes a £50m contract to supply GAZ Group, in Russia, with exhaust gas control systems for a new range of heavy-duty diesel engines.

“According to the GDP figures, manufacturing contracted 0.9 per cent, the biggest fall for more than two years, but, in comparison, GT Group is bucking the trend with the business on track to grow by 25 per cent in 2012.”

James Ramsbotham, chief executive of the North East Chamber of Commerce, said: “The region is affected by challenging economic circumstances as much as any other, but the continued excellent performance of North- East manufacturers and exporters perhaps demonstrates why the region is growing more strongly than much of the rest of the country.”