Newspaper article The Journal (Newcastle, England)

Future Looks Brighter as Economy Starts to Recover

Newspaper article The Journal (Newcastle, England)

Future Looks Brighter as Economy Starts to Recover

Article excerpt

Byline: By Paul Mankin

Paul Mankin looks at what 2004 may hold for the regional mergers and acquisitions market

Needless to say it's been a tough year; the North-East has not been immune from external economic drivers that impact financial markets and global trade. Many local businesses continue to feel the heat and, for some, 2003 has been a battle for survival while others still face a struggle in the year ahead.

But it's not all doom and gloom. In the last year we have seen a steady stream of good news coming out of the region.

The completion of high-visibility projects, such as Baltic, contributes to a feel good factor in the region's cities, and it's this feel good factor that's helping to drive the so-called "brain gain".

A recent report by Demos and the Royal Institution of Chartered Surveyors (RICS) showed that local graduates and professionals are staying put and building a life and career in the North-East, while others from the South-East are relocating here, attracted by the improved quality of life, affordable houses and the cultural buzz.

A growing bank of professionals in the region is central to building foundations for growth and prosperity in the region, a key objective for regional development agencies such as One NorthEast.

From a mergers and acquisitions (M&A) perspective, activity in the North- East did pick up in the last quarter of 2003 as did the FTSE 100 index, which climbed to reach 4500 for the first time in 18 months. Confidence in the boardroom is improving and the global economic recovery is beginning to take hold. Assuming that interest and exchange rates remain stable, we think the corporate finance market will turn the corner and we will see a steady pick up in deal activity.

Looking forward, during 2004 we expect that retail and leisure sectors will remain buoyant. Local companies such as Ultimate Leisure and Parkdean are performing well on AIM and look set to continue to grow through acquisitions and organically. …

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