Low customer demand and late payments are taking a toll on businesses in the North East, a new report says.
The Business Confidence Monitor from chartered accountancy body ICAEW found that customer demand was a growing challenge for around half of businesses in the North East, while late payments were a more pressing problem for firms in the region than anywhere else in the UK.
The report also found that business confidence in the North East was negative, with companies in the region among the most downbeat in the whole of the UK, while export growth next year is predicted to be the weakest of any region.
The North East was also one of only two UK regions, along with the West Midlands, where employment is expected to fall next year.
Dr James Callaghan, ICAEW Northern regional director, said: “The results from the Business Confidence Monitor show that businesses in the North East have really struggled, experiencing a lack of demand from customers and more of a problem with late payments than in any other region of the UK.
“As a region our manufacturers are very dependent on exports to the EU, which likely reflected low confidence among members. Businesses in the North East now need the Government to redouble its efforts to get a good trade deal with the European Union, to ensure they can still easily trade with our biggest and closest trading partner.”
Nationally, the report found that late payments were a rising concern for a third of businesses, but this figure was 43% in the North East.
Groups including the Federation of Small Business have raised growing concerns about late payments hitting small businesses during the pandemic, with widespread problems in the economy appearing to cause a return to bad practices in some larger companies.
A series of reports issued this week have painted a mixed picture on the state of the UK economy, with the manufacturing sector growing at its fastest rate in 35 months in November and construction also seeing continued growth.
But activity in Britain’s services sector slammed into reverse last month during England’s second national lockdown, though the impact was less severe than first feared.
Now all eyes are on the continuing post-Brexit negotiations to see if a deal can be reached that allows North East firms to be able to continue exporting competitively to the EU. Rumours that a deal was close have faded with indications from both sides of major differences between them.
