North East firms report domestic sales hitting near 3-yr high – NECC

NORTH East businesses saw domestic sales in the final three months of 2010 hit their highest level since 2007, according to one of the region’s most comprehensive economic reports.

 The North East Chamber of Commerce’s (NECC) quarterly regional economic survey – the North East Business Barometer in partnership with Barclays – shows that companies in the North East also saw an upturn in orders both home and abroad compared with the same period the previous year.

 The report demonstrates that the business community in the region is in better shape to rise to the demands of the impending public sector cuts.

 However, the data also shows this has not yet instilled confidence among businesses across the board to make major investments. Responses to the survey indicated major investment plans remain weak and future workforce.

 Ross Smith, NECC head of policy, said: “Hitting a three-year high for domestic sales is a great result for North East businesses, although we have to recognise that the past three years were a tough trading period for most firms. Overall though, we should welcome the results of this latest NECC survey.

 “We are concerned that our workforce numbers among our member companies are static. We are entering a crucial period for the economy where the North East labour market will be hit by redundancies in the public sector. We need private sector recruitment to be buoyant to meet the demand for jobs. These figures suggest that gap is not yet being filled, which was borne out by the rise in unemployment shown in the most recent set of official figures.

 “It is evident from the latest North East Business Barometer that we need a clear focus on supporting businesses to sustain stronger growth in 2011. NECC members are performing strongly to grow sales but we must create the most positive business environment possible in the North East to ensure this is sustained and converted into jobs growth quickly.”

 Andrew Miller, Director of Barclays Wealth, added: “We can enter 2011 with confidence that the North East is recovering strongly and that many of our businesses can look forward to a positive year ahead.”

 Across the set of 11 indicators, seven are in positive territory – indicating growth, one is at zero and three are negative.

 NECC’s data shows that the latter half of 2010 was more successful for manufacturing firms than it was for the service sector.

 Nearly two-thirds of manufacturers pointed to energy prices as being of greater concern now than three months ago. More than half of service sector businesses (57.9%) also cited it as increasingly problematic.

 Mr Smith added: This adds further weight to the recommendations in NECC’s recent energy policy report, Sustaining Growth, regarding energy consumption and we must see swift action on these.

 “Overall, the Barometer shows that the North East entered 2011 on a really positive note. It is vital that we now sustain that growth over the course of the year.”

 A summary of key indicators:

Indicator Balance (all companies) Balance Q4 2010  Change on last Quarter  Change on last Year 
UK Sales  7.8   

+24.2

 

 

+7.8 

UK Orders  12.5   

+33.7

 

 

+9.8 

Export Sales  6.3   

-1.4

 

 

-0.7 

Export Orders  6.4   

-1.5

 

 

+2.8 

Plant Investment Plans  -2.8   

+7.7

 

 

-7.4 

Training Investment Plans  -7.0   

-8.0

 

 

-16.2 

Prices  -6.0

-5.0

 

 

+1.9

Current Workforce 0.0

+1.8

 

+2.4

Future Workforce 7.5

+8.5

 

+1.5

Future Profitability 22.9

+15.4

 

-5.7

Future Turnover 30.3

+21.8

 

-7.5

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