A THINK-TANK report paints a bleak picture for 4,000 workers potentially scouring the Tees Valley for jobs if the mothballing of a steel plant goes ahead.

An annual analysis of 64 British cities and regions released by the Centre for Cities today shows that Teesside has one of the lowest rates of new business start-ups in the country and one of the lowest rates of job creation, combined with an existing high unemployment rate.

Although the lack of startups was in part attributed to a historical trend of large employers on Teesside, they include Corus, which is expected to mothball its Teesside Cast Products facility near Redcar next month with the loss of 1,600 direct jobs and about 2,500 in the supply chain.

There have also been hundreds of job losses in Teesside’s chemical industry in recent months, with the mothballing of plastic producer Artenius, the closure of Invista, and the impending closures of Dow and Croda.

The annual Cities Outlook report, published by the independent research institute, evaluates the economic performance of the UK’s 64 main cities.

It rated Middlesbrough, which also includes Redcar and Stockton, 59th out of 64 areas for the number of business start-ups, 61st for the rate of employment growth between 2006 and 2008 and 56th for the percentage of its working age population in employment last year.

In its analysis of cities with the highest concentration of employment in sectors most vulnerable to the recession, Middlesbrough was fourth in the construction category.

In the wider region, Sunderland was bottom for business creation and Newcastle 51st out of 64 areas. Figures for Durham were not included in the report.

York did best of the region’s cities, in the top ten for employment and 11th for employment growth.

A spokeswoman for Centre for Cities said: “Both Middlesbrough and Sunderland have a trend of very large employers and that is one of the key reasons it sees such a low number of business start-ups.”

Andrew Sugden, of the North East Chamber of Commerce, said: “The data in the report about new businesses is a bit misleading because there is a historical lag.

“We have recently seen a real burst of entrepreneuralism on Teesside. Having said that, it is clear there are a number of challenges facing Middlesbrough and the Teesside area.”

Tim Pain, One North East’s head of business, enterprise and skills, said: “We are aiming to accelerate growth through the £3.7m Tees Valley integrated business support package, which is geared towards opening up avenues to enterprise and also the formation of local networks in deprived areas to encourage business start-ups.”

Mr Pain said he believed the report was not all negative.

He said: “There are some optimistic signs in this report, with Middlesbrough featuring in the top ten for wage increases, demonstrating that more new firms are surviving.”