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Sustained Confidence Underpins Growth Of North East Firms
NORTH East companies are the most optimistic across England and Scotland about business prospects over the next six months, a new report reveals.
The latest findings continue a four year theme of general business optimism from North East companies responding to the UK Survey of Regional Economic Trends.
The CBI, nine Regional Development Agencies and Scottish Enterprise commission Experian Business Strategies to carry out a six-monthly analysis of regional business well-being and plans for future activity.
The latest UK survey reveals a balance of 29% of North East companies expect the general business situation to improve over the next six months, the most optimistic region in England and Scotland.
Sarah Green, CBI North East Regional Director, said: “These findings continue a theme of sustained confidence amongst North East firms over the past four years of the regional trends survey, which confirms that our economy is in good shape.
“The North East is the most upbeat region in England and Scotland with a balance of 29% of firms believing that business is getting better, resulting in North East employment growth greater than any other region.
“Business must use this as a springboard to increase investment in skills, innovation and technology to maximise the positive trading environment.
“Fifty three per cent of firms still believe they are working below full capacity so there is potential for the region to achieve even more.”
Margaret Fay, One NorthEast Chairman, said: “It is particularly pleasing to see that over the next 12 months the North East is the joint most optimistic region regarding domestic orders, with output expectations also higher than any other region and profit margins also expected to show a significant rise moving forward through 2007.
“There is a general North East buoyancy throughout this report which is very encouraging and reflects the health of the regional economy.
“Regional companies have also embraced technology to drive their business forward, with our region having the largest number of company websites and 90% of firms having access to internet broadband.”
The survey’s key findings show:
- The North East is the most optimistic region about the next six months, with a balance of 29% of companies anticipating the general business situation to improve
- In the next 12 months, the North East is the most optimistic region regarding domestic orders with 45% expecting to see an upturn
- North East companies are the most upbeat about output volume – a balance of 47% expecting to see an increase
- Over the last 12 months, employment levels grew fastest in the North East with a balance of 23% of firms reporting increases and the region forecasting a further 16% growth over the next year
- The North East is the joint best region for firms with their own website – a balance of 80% - with 90% having access to broadband
- The North East has a higher proportion of firms with R and D links to universities than the England and Scotland average with a balance of 13%
- North East businesses expect profit margins to grow by 15% over the next 12 months after an overall decrease of -7% in the past year
- Regulation/red tape, finance shortage and transport costs were identified as the main barriers to growth in the region
- The North East is the only region expecting to spend less on plant and machinery in the next 12 months, but plans to spend more next year on buildings, product and process innovation and training and retraining
- Access to grants was the method of Government support favoured most in the North East with a balance of 73%
- Fewer employers in the North East provide training to over half their employees than in any other region with a balance of 20%
- Nearly 90% of regional firms said they needed to improve staff skills over the next 12 months, with a particular emphasis on marketing, management and team working
- A balance of 70% of North East companies think road pricing would increase overall travel and transport costs
North East firms generally fall below the England and Scotland average for environmental performance
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