Confidence is growing among North East companies despite a mixed economic picture, a business survey suggests.
The Natwest North East Growth Tracker Business Activity Index, which measures the month-on-month change in the region鈥檚 manufacturing and service sectors, has returned a score of 48.8 in May.
That was an improvement on the previous month but below the 50.0 no-change mark and indicates a small monthly contraction in the region鈥檚 business activity.
Trade agreements and the rowing back of US tariffs contributed to a rise in business confidence, the survey found, while there was also an easing of inflationary pressures.
But staff costs continued to rise and employment in the region has now fallen for six months in a row.
Companies in the North East continued to see a decline in orders in May, NatWest said, though the rate of contraction was moderate.
The region鈥檚 exporting sector has improved for 16 months in a row, according to the survey.
Sebastian Burnside, chief economist at NatWest, said: 鈥淔alling fuel costs helped to ease pressure on the pass-through of higher operating expenses to clients, highlighted firms in the North East.
鈥淭his saw businesses raising their charges for goods and services at the softest pace since last November. Moreover, business confidence rebounded during May after the pause on US tariffs had eased uncertainty clouding the trade outlook.
鈥淭hat said, concerns remained about the health of the domestic economy.鈥
The NatWest survey is the second report from one of the 海角视频鈥檚 largest banks to suggest rising business confidence in the North East.
鈥淎t the end of May, the latest Business Barometer from Lloyds found that companies in North East were reporting higher confidence in their own business prospects as well as the wider economy.
The Growth Tracker has been released ahead of the publication of some key economic data, including publication this week of official figures on national and regional employment and on 海角视频 GDP.
Tomorrow (Wednesday) will see Chancellor Rachel Reeves publish the Government鈥檚 Spending Review, setting out departmental budgets and priorities for investment for the next few years.
