Housing market
All the indicators agree that the weak recovery in the housing market in the North East petered out in the second half of 2010 and the decline continued in 2011.
Construction output, however, was sustained by civil engineering contracts and the value of construction projects started in the North East declined only slightly in the twelve months to April 2011, a better performance than in any other part of the UK.
For at least twenty years house-price inflation and house prices in the North East have been lower than in any other part of the UK.
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Short-term outlook
On the basis of strong recent performance and increasing demand for exports and the particular specialisms of companies in the North East, manufacturing in the region has good prospects for output growth over the next few years, but conditions are not yet secure enough for employment to increase.
Private-sector services and outsourcing are still doing well and are expected to continue to increase output. The employment growth likely from these services will, however, only partly counterbalance the heavy job losses already being announced as a result of cuts in spending by central government and local authorities.
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