Businesses in the North East finally making progress

The Latest UK business news indicates that enterprises in the North East private sector last December were pleasantly stable with some new businesses coming in. This report was welcome news for many companies in the area which for the past several months had only heard of business slowdowns.

However, there were companies that continued to let go of employees which they had been doing since the month of May last year. They told Lloyds Business Activity Index that the reason for this was they were not getting new orders or clients.

There was a slight reduction in business activities over December which started at the beginning of the holidays and eventually became a national trend. There was a marginal increase in new businesses for the month of December which ended reductions during the preceding two months with some firms noting minor increases in client demand.

Business news in regards to employment in December was not very good with companies reporting lower employment and at a faster pace than November, but since May of 2012, staffing needs have decreased. Those that decided to downsize that resulted to letting go of employees gave weakened demand as the primary reason for the move.

Input costs for the production of goods and services in the sector increased, however, the pace of the increase was slower, though, compared to the other parts of the country and it was mainly due to higher fuel expenses brought about by the higher power demand. Many companies increased the prices of their products and services and they had been doing this since May of 2012, where the pace of increases is faster in the services sector than other sectors.

Lloyd’s director for the north east Sector, Craig McNaughton, said that business activity in the area had suffered a dramatic slowdown which was seen in the static outputs and minimal growth was registered in the month of December. He added that the sector’s business performance mirrored the dismal business performance in the whole of UK.