The Centre for Economics and Business Research’s regional prospects report finds that the long time bottom of the league region will move to the top of the rankings.
The North-east will contract by 2.5 per cent in 2009 and see an estimated 26,135 job losses.
Northern Ireland and Wales are forecast to be the least affected in the UK contracting by 2.4 per cent in 2009.
Northern Ireland is forecast to see 16,094 job losses in 2009 while Wales will see 27,465 job losses.
London meanwhile is forecast to be the worst affected part of the UK as its disproportionately high reliance on financial and business services, will be particularly affected.
While the downturn will not spare any of the regions, CEBR now forecasts that GVA growth in the capital will decline by a staggering 3.4 per cent in 2009, making it the worst performing region in the United Kingdom in 2009.
There will be an estimated 147,443 job losses in 2009 according to the cebr.
CEBR managing director Mark Pragnell said: “The public sector will be the only growth industry in 2009.
“While this means that some of the regions will be somewhat cushioned from the worst of the economic downturn, this will not save them from a major recession over the next year.”