IN the second half of the year, the region’s green energy and manufacturing industries offered glimmers of hope for the future, but the spectre of the Government’s Comprehensive Spending Review led to gloomy predictions for the North-East economy.

As a result of Chancellor George Osborne’s spending crackdown, an estimated 70,000 job losses are expected across the public and private sectors in this region.

Manufacturing, construction and financial services were predicted to be the sectors hit hardest by the cuts because of their links to the public sector supply chain.

The total reduction in growth in the regional economy is estimated at £1.8bn over the next five years. At the close of the year, the North-East had the country’s fastest growing rate of unemployment.

Middlesbrough, with its relatively high dependency on public funding, was identified as the UK town that would struggle most to recover from the effects of Mr Osborne’s axe. Middlesbrough Council was faced with the challenge of cutting £45m from its annual spending of £236m by 2015; equivalent to £277 per person in the borough.

Ray Mallon, the town’s mayor, joined opposition politicians, union leaders and members of the public in expressing concern that the cuts would hamper efforts to tackle longterm deprivation in Teesside.

Opposition MPs pointed to a widening North-South divide after it emerged that councils in the North were being asked to bear the burden of the cuts while authorities in the South were being treated lightly.

Business Secretary Vince Cable visited the region to tell business leaders that the private sector needed to step up and generate employment to prevent the country from slipping back into recession. He said the spirit of enterprise would prove crucial in sparking the region back to life.

The region’s low-carbon sector proved buoyant throughout last year and is regarded as a potential catalyst for fuelling the recovery.

The North-East has established itself as a hub for green industries, with TAG Energy Solutions, Tata Steel and Clipper Windpower all developing plants in the region connected to offshore wind turbines, Romag, in Consett, leading a strong solar energy sector, and Nissan set to manufacture the Leaf car and electric vehicle batteries in Sunderland.

More traditional sectors such as steelmaking, processing, fossil fuels and tourism have also had their share of success stories throughout last year.

Whether they can build on that upward trend to offset the impact of job losses in the public sector will be key to re-balancing the region’s fortunes this year.