Newspaper article The Journal (Newcastle, England)

Lack of Development Could Hit Growth for North East SMEs; CHRIS DONABIE, Head of DTZ's Industrial Agency Team in Newcastle, Warns That a Distinct Lack of Development in the Region Could Stall Productivity

Newspaper article The Journal (Newcastle, England)

Lack of Development Could Hit Growth for North East SMEs; CHRIS DONABIE, Head of DTZ's Industrial Agency Team in Newcastle, Warns That a Distinct Lack of Development in the Region Could Stall Productivity

Article excerpt

IN a recent interview Mark Carney, Governor of the Bank of England stated that Britain is "more than halfway" along the road to recovery.

According to his comments, the "easy bit" of the recovery has taken place and we are now coming to the tougher part, where the economy needs to see an increase in productivity, pick up in real wages and export competitiveness which will have an impact on future growth prospects.

As the only region in the UK with a positive balance of trade in exports, the North East's credentials as a highly productive and competitive location are unquestioned. To maintain this position, our region's producers will increasingly rely on being able to maximise the efficiency of their existing facilities or secure new sites for expansion to meet demand. Due to the acute shortage of Grade A industrial accommodation as a direct result of take-up and lack of speculative development over recent years, we have seen Grade A availability fall to critical levels.

In addition, a PMI survey released recently by Markit revealed that UK manufacturing growth is at a 14-month low and there is now real concern that the lack of alternative new sites will mean some occupiers are forced to remain in premises which are no longer fit for purpose, directly hitting productivity.

The impact is being acutely felt at the small to medium end of the development scale where nothing of note has started in any real volumes for companies seeking premises of sub 50,000 sq ft.

That is not to ignore the 50,000 to 200,000 sq ft bracket where supply is equally scarce and any new development has been on the back of a forward occupier commitment.

The next 12 months will be critical for the region's industrial market with the prospect of increased interest rates, coupled with the uncertainty of a general election meaning many occupiers need to be creative in their operational management and long-term planning. …

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