North East companies are seeing their fastest rise in new business for more than three years, an influential survey suggests.
The latest NatWest Growth Tracker found that companies in the region were seeing strong order books and an easing of cost pressures, with the region now reporting eight consecutive months of growth. October’s rate of growth was the highest in 18 months.
The headline North East Growth Tracker Business Activity Index, which measures month-on-month change in the region’s manufacturing and service sectors, increased from 53.0 in September to 54.8 in October, though there was less positive news as regional firms cut employment levels for the first time in eight months.
NatWest’s survey suggests the North East saw the Ƶ’s second highest level of growth in October, outperforming all of the other regions and nations except for London. Firms also remained confident regarding the outlook over the coming 12 months, as the Future Activity Index registered above the neutral 50.0 mark. Optimism was linked to growth expectations and new contract awards.
Sebastian Burnside, chief economist at NatWest Group, said: “The North East remained on solid footing in October, data from the NatWest Growth Tracker revealed. New business placed with private sector firms rose again, and at a sharp pace that was the most pronounced since July 2021. In turn, activity growth strengthened, with the rate of increase the strongest in a year-and-a-half. Moreover, receding cost pressures contributed to the softest rise in charges in 2024 so far.
“Looking to the future, there were some mixed signals. The increase in demand placed pressure on capacity in the private sector, resulting in a renewed rise in outstanding business.
“That said, firms opted to reduce staffing levels for the first time in eight months. Optimism about activity levels for the coming year were also broadly similar to that seen in September, with North East companies among the least upbeat regionally.”
The NatWest survey is the latest to present an unexpectedly positive picture from North East businesses.
Last month, the latest quarterly survey from the North East Chamber of Commerce found firms reporting increasing Ƶ sales and a big jump in the number of companies seeing growth in exports. There were also separate reports of high levels of business confidence in the North East from the Entrepreneurs’ Forum, Lloyds and the Institute of Chartered Accountants in England and Wales.
The new results come ahead of a key week of updates on the regional economy, with figures out today on regional unemployment and official data released on Friday on the size of the Ƶ economy since July’s General Election.
