Growing international demand for their goods and services is driving increased confidence among businesses across the north-east, new survey findings show.
And if bullishness about prospects is a guide to future performance, the region will easily outperform the rest of the UK this year.
More than two-thirds of north-east survey responsents (70%) export goods and services.
Nearly one-third (32%) of all firms are forecasting growth in overseas activity in 2024.
Across Britain, the proportion of businesses expecting a better year for export sales is 26%.
And just 10% of firms in the north-east’s export powerhouse economy expect their overseas sales to decline, compared with 25% for the whole UK.
The regional data was captured in the latest North-east Quarterly Economic Survey by Aberdeen and Grampian Chamber of Commerce (AGCC) and law firm Gilson Gray.
Nearly one-third (31%) of companies in the north-east, in line with the rest of the UK, expect to grow their domestic sales in 2024.
But just 19% of north-east firms expect domestic sales to decline, against 25% nationally.
Upbeat profits forecast
Meanwhile, half of companies in the north-east (50%) are predicting profits will grow this year. On this measure, the UK figure is 47%.
And nearly three in five north-east firms (58%) expect their revenue to increase, against 56% UK-wide.
‘Growing confidence’ among north-east firms
AGCC chief executive Russell Borthwick said: “There is a growing confidence among companies in the north-east.
“Almost three quarters of the firms we surveyed are exporting their good or services, underlining the global demand for our products and expertise.
“For all of the positives, it is very clear the UK is still teetering on the brink of a recession. We need imaginative plans for enabling economic growth, something which needs to be front and centre of the forthcoming election campaign.”
According to the survey, north-east firms are growing their workforces faster than UK peers.
Nearly two in five of the region’s businesses (38%) expect staff numbers to increase in 2024, against 31% nationally.
And while 76% of firms UK-wide reported difficulties in recruiting suitable staff, this was lower in the north-east at 71%.
But nearly two-thirds of north-east firms (64%) said they had difficulty finding candidates for skilled manual and technical roles, against 51% for the whole UK.
Which cost pressures are the worst for north-east firms?
One of the most startling differences between the regional and UK data is highlighted by the upward cost pressures on businesses.
North-east firms are feeling the heat more than peers nationally.
Most marked are fuel and labour costs, with 66% of north-east firms citing this as a growth constraint, against 37% of UK companies.
Labour costs are another bugbear, with 79% of north-east businesses, compared with 67% of UK firms, citing these .
Inflation remains the largest growth constraint nationally. North-east firms are more concerned about interest rates, taxation and business rates than the UK as a whole.
Gilson Gray says north-east businesses will need ‘strong rigours’ to navigate cost pressures this year
Findlay Anderson, partner, head of corporate, Gilson Gray, said: “It is encouraging to see a large majority of local firms reporting sales growth both domestically and internationally.
“The region’s strength as an exporter continues to position it more robustly than other parts of the UK and the report generally points to growing confidence in local businesses.
“However cost, payment and pricing pressures continue to be a challenge to profitability and businesses will require to retain a focus on strong rigours to navigate these factors during 2024.”
Key findings from the survey, which atttracted responses from 167 north-east businesses, will be discussed at an AGCC breakfast event in Aberdeen this morning.
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