WHILE the South-West's economy has weathered recession relatively well, its future growth will be constrained by a combination of public-private sector rebalancing, reduced household spending and fragile business confidence.

That’s the message from the South West Observatory’s recent update to its State of the South West report following the Chancellor’s Budget.

It highlights how, although the UK economy is now in recovery, it faces a number of constraints to growth including weak consumer and government spending, modest investment by business, and a less than hoped for increase in net exports.

As the public sector recession takes hold in 2011, the question remains whether the private sector is ready, willing and able to fill the gap.

In its spring 2011 Economic Projection, the Observatory’s Economy Module at the South West RDA points to widespread concerns that the UK will struggle to achieve even modest growth during 2011.

Nigel Jump, chief economist at the South-West RDA/Observatory Economy Module, said: "Following on from last week's Coalition budget and the ongoing changes to regional structures, it is vital for actors across South-West England to understand the many aspects of the region.

"The latest on-line update of the ‘State of the South West’ is part of the foundation we all need as we assess the way national economic policy, global events and local conditions are tending to dampen growth in the short term."