News Article

The North East response to a national business survey indicates that many regional companies are facing up to the recession with more confidence by pursuing new markets.

Key findings from the Ipsos MORI National Business Survey (NBS) have concentrated on business expectations and how companies are planning to combat the effects of the challenging economic climate in the coming months.

Nearly eight out of ten of all companies canvassed are planning to pursue new markets or customers at some point during the next twelve months.  This is up 22% from 56% in the region since the last survey in May 2009.

Customers of the North East Business Link service (Business & Enterprise North East) are more confident about the coming year than other regional companies, with greater optimism on a range of outcomes including volume of output, orders, overall investment, profit margins, cash flow and employment.

“This survey reflects the cautious optimism of our regional economy which has moved back into growth,” said One North East Chief Executive Alan Clarke.

“The North East demonstrates broadly balanced, realistic and sensible expectations about the business climate over the next year.

“There are encouraging elements of good news, with firms planning to respond to the challenge positively by pursuing new markets and customers far outweighing those who may be planning to cut staff costs.”

There is also a balance in expectations from the region’s companies on the ongoing business climate.  A quarter expect to see a general improvement over the next year whilst another 25% forecast some deterioration over the next 12 months.  The remaining half expect stability.

“Those who are customers of Business & Enterprise North East are a little more positive about the business climate outlook than other companies,” added Mr Clarke.  “Only 19% expect conditions to deteriorate in the coming year with almost twice as many (37%) forecasting improvement.”

Other key findings include:

• 27% of companies expect volume of output to be higher in the next year
• Employment expectations remain subdued with just 16% of businesses forecasting an increase in employment over the next year, but only 13% of companies forecast job losses.
• Profit margins are forecast to remain under pressure with 36% of North East companies expecting margins to fall.
• Close to one fifth (18%) of companies expect to spend more on training or retraining over the coming year.
• Just over one in ten (11%) of firms plan to increase spending over the next year compared with 26% of companies which forecast lower investment in plant and machinery.
• Business Link North East customers are less likely to be planning to cut jobs, hours or salaries or to delay payments to their supplier base.

Business awareness of the regional development agency is high with over one in three (36%) of North East businesses reporting they know either a great deal or a fair amount about the role of the One North East.

The national picture for the largest survey of businesses in England and Northern Ireland reveals that manufacturers have the most positive outlook for the next year compared to other sectors. 

With 37% expecting the climate to improve and 41% believing it will remain stable, this optimism has been created due to better exchange rates helping exporters and improved demand. Expectations of domestic orders have improved across all sectors, but the manufacturing sector in particular has benefited.

The national survey also shows that businesses which use Business Link are likely to perform better, with 35% stating their performance improved over the last 12 months having used Business Link.

The National Business Survey by Ipsos MORI on behalf of the Regional Development Agency (RDA) Network and Invest Northern Ireland is one of the largest and most statistically robust of its kind carried out in the UK.  Senior business leaders from over 5,300 companies respond from all sectors of the economy.

The survey is carried out twice a year and asks a variety of questions ranging from business optimism to orders and output, skills issues, cost pressures and environmental performance.

For information on the wide package of support available to regional companies, call Business Link on 0845 600 9006 or visit www.businesslink.gov.uk/northeast

Ends.

For further information contact Gordon Arnott, PR Manager at One North East, on Tel: 0191 229 6309, mobile: 07713 317883 or gordon.arnott@onenortheast.co.uk.

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