Private sector firms in the North East saw an increase in both activity and confidence in August, a new business survey suggests.
The latest NatWest Growth Tracker data for the region - which measures the output of the region’s manufacturing and service sectors - rose to a score of 54.5 in August, with any score above 50 denoting growth in the local economy.
Companies in the region were increasingly confident regarding the year-ahead outlook for activity, and while jobs continued to be cut, it was at the softest rate in the current nine-month sequence of contraction. Cost inflation for firms eased to the slowest since last November 2024 and though firms raised their prices, they remained below input costs.
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The August survey data pointed to an increase in new work for the second time in three months and the degree of business optimism was the most pronounced for five months. The positivity from North East firms was ahead of the national average, the survey found.
Malcolm Buchanan, chair of the NatWest North regional board, said: “Firms across the North East private sector reported a stronger improvement in operating conditions midway through the third quarter, with a steeper rise in activity coupled with a renewed expansion in new business intakes. Growth in the region also exceeded the national average, and was often attributed to the completion of delayed orders and stock-building efforts.
“Firms were still looking to the future with optimism, with the degree positive sentiment the most pronounced since March. The stronger outlook supported a softer reduction in employment levels, with some companies citing the improved economic outlook as a factor behind hiring activity at their units.
“Cost pressures remained historically elevated in the latest survey period, but the rate of cost inflation retreated to the lowest in nine months. That said, firms continued to look at mitigating rising costs by lifting average prices charged. In fact, the rate of charge inflation was the most pronounced since May.”
The tracker has been released ahead of the publication of some key economic indicators. The latest figures on GDP, trade and regional unemployment will all be released in the next week.