North East Business Growth Slows Amidst Global Uncertainty and Rising Costs
Business activity in the North East of England experienced a slowdown in March, marking the slowest growth rate this year. This moderation in expansion is attributed to softer sales and increased cost pressures, largely influenced by global events, including the conflict in the Middle East.
The latest NatWest Growth Tracker indicates that companies in the region are reporting higher prices and a decline in demand. Input cost inflation has surged to its highest point since January 2023, prompting businesses to increase selling prices to protect profit margins.
Malcolm Buchanan, chair of the NatWest North Regional Board, commented that the North East private sector concluded the first quarter of 2026 on “uneven footing.” He noted that the moderation in growth is linked to a significant rise in cost pressures, particularly from energy price increases following the Middle East conflict.
The survey reveals a decrease in the North East Growth Tracker Business Activity Index, falling from 53.8 in February to 50.4 in March, signifying only a marginal increase in business activity. This expansion rate aligns with the UK national trend.
Despite the challenging economic environment, the North East observed a slight increase in employment levels, making it one of the few UK regions to record job creation. However, overall business confidence for the year ahead has softened, reaching its lowest point since August 2025, with concerns about the domestic economy and the broader impact of geopolitical events weighing on sentiment.
The report precedes a week of significant economic data releases, including monthly unemployment and inflation figures.