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"Parts of our manufacturing base are still pretty robust, because of the nature of the manufacturing that they're engaged in."

Minister for the North East, Nick Brown

The past ten years have seen London become the financial capital of the world, with a house in the city and a registration on the FTSE becoming the absolute must-have for Russian Oligarchs, Middle Eastern Oil billionaires and emerging Chinese business giants alike.

With its base still very much in manufacturing and the public sector, and an image problem that would see the self-proclaimed Masters of the Universe in the City rather cut off a limb than move here, the North East has seen little of the action in this new, service based economy, unless you count call-centres as a satisfactory pay-off.

But as the South's financial services economy fails, and with it, the kind of political thinking and tax policies that encouraged it, there is an air of optimism that this could be the North East's big chance to come to the economy's rescue, and close the economic divide.

The rise and fall of the money men

In 2001, financial services accounted for 5.5% of Britain's GDP. By 2007, it accounted for 10.1%. Over the same period, manufacturing index has barely changed. As a proportion of our GDP, it has seen a period of steady decline.

But that struggle in itself has forced the North East to look to new markets, and global buyers to sustain its self. Around 70% of what the North East produces is exported, and that could well be the cushion that keeps the worst of the coming hard times at bay.

The 91热爆鈥檚 North East Business Correspondent, Ian Reeve has watched as the region鈥檚 manufacturers evolved to survive in the global marketplace.

"There are tough times coming and it's hard to be bullish ... but this is an opportunity, a very real opportunity, for the manufacturing sector."

Ian Reeve, 91热爆 North East Business Correspondent

鈥淚f you take both our ex-ICI sites, Billingham and Wilton, you鈥檝e seen them go from manufacturing commodity chemicals 鈥� chemicals measured out in tonnes 鈥� reinventing themselves to producing chemicals measured in grams, so-called speciality chemicals, but in essence it is still manufacturing.鈥�

With interest rates rising and unemployment in the region reaching 7.5%, though, it may be hard to be too bullish about the future.

鈥淢anufacturers benefited from the wealth that was created in The City. It鈥檚 brought money into the economy. You鈥檝e seen shares in companies who trade on the London Stock market who are engaged in manufacturing 鈥� until recently 鈥� soar.鈥�

But the fact remains, as the impending 鈥榖ad times鈥� stalk up the A1 towards us, the sector that created the North East as we know it, is still pulling in new money.

Continuing Investment

The 500 Pharmaceutical and Chemical companies in the region that form NEPIC generate in excess of 拢10bn of sales and is 30% of the region's industrial base, employing about 40,000 of us.

These companies are expected to put around 拢7bn of investment into the North East in the next seven years.

Because they serve a global market, lost business from declining American and European markets could be largely offset by growing demand from countries like India and China, who already buy in vast quantities from the North East.

Robin Davison, Chairman of the Tees Valley Engineering Partnership's Marketing Group, says there is 拢5.3bn of work that needs doing on Teesside, with a new oil refinery, biofuels plants and power stations currently in development.

"To coin a phrase that Norman Tebbit said years ago, is that, 'We get on our bikes and we go to work.' "

Robin Davison, Tees Valley Engineering Partnership

SABIC have almost completed the world's largest low density polyethylene plant on Teesside. The engineering firm KCA Deutag has opened an office on Teesside, while the Luxembourg blast furnace specialist Paul Wurth and Costain Oil and gas are both looking at opening premises in the area, also.

By 2014, he says the Tees Valley will need 20,000 extra engineering workers, to service that expansion and has called for the government to initiate a retraining programme to give workers losing their jobs in the construction industry the skills that the process industries are in desperate need of.

Small businesses in the North East will get a share of 拢350 million to help them train staff.

Nick Brown MP, Minister for the North East, said, 鈥淎 successful economy in the North East relies heavily upon the success of small businesses. There is no doubt that staff training makes business succeed."

But that is a share in a national pot of money, and it is money that is in short supply at the moment.

Chasing the money

In fact, while businesses in the North East cry out for state investment, claiming they can help carry the British economy through tough times to come, given the chance, some funding is moving away from the region鈥檚 economy.

拢35 million earmarked to help develop businesses in the North East has been clawed back by the government, to support the housing market, most of which will be spent in the South, where the housing slump has been the most severe.

Robin Davison is one of many in the region, unhappy to see it go. "That's money out of our pocket in the Tees Valley and that should be put back into the pocket of the people who live here, so that we can continue to develop out area and not pay off bankers' 拢560,000 a year pension plans."

Teesside beam mill produces 150,000 tonnes a week

The Department for Business told 91热爆 Tees, "Manufacturing is essential to our future as a balanced and mixed economy where manufacturing complements services in creating jobs across all regions, as it does in the North East. As a vital hub for manufacturing with key sectors such as energy, engineering, chemicals & automotive, the North East contributes strongly to the UK's success as the sixth largest manufacturer."

North East Minister Nick Brown promises, though, that there will be government money for the region's infrastructure. "I think there's a good case for the Tees Metro and if we phase the programme so that it's affordable and if we try and argue for matched funding, rather than insist that government pay it all, I think we can probably find a way through and get it done."