Mixed fortunes predicted but let's look for the potential.

(From The Journal)

At the dawn of a new year as heavy with challenges as any for decades, nebusiness asked some of the region's business leaders and some of our favourite commentators to share their thoughts on what lies ahead and how to deal with courage and traditional North East pragmatism.

Ian Shepherdson, leading Wall Street and City economist, currently living on Tyneside

BRACE yourself. This year is going to be awful, as the full horror of the consequences of the credit bust manifests itself in unemployment figures.

Almost every sector of the economy will shrink this year, with particularly rapid declines in consumer-facing businesses whose customers typically rely on credit to finance major purchases.

But manufacturers and business service providers will feel the pain too, as companies seek to reduce costs and slash their capital spending plans. The surge in joblessness will bring back very painful memories of the early 1980s, forcing the Government into further measures to limit the depth of the downturn.

The package of measures announced in the Pre-Budget Report is simply not big enough to make a real difference.