The North East economy stalled slightly in June as it ended a four-month run of increasing growth, a business survey suggests.
The NatWest Growth Tracker – which measures month-on-month change in the region’s manufacturing and service sectors – fell from 54.0 in May to 52.0 in June. Though that score still denotes a growing economy, it is the softest level of growth since March.
Companies surveyed for the report reported healthy order book volumes and a third consecutive month of growth in new business. There was also a sharp increase in hiring in the region, with new workers brought in to aid production and activity requirements and to support companies’ growth plans.
Businesses reported a rise in cost pressures, particularly from wages and raw materials.
Malcolm Buchanan, chair of the NatWest North Regional Board, said: “The North East remained on solid footing in June, data from the NatWest Growth Tracker revealed. New business placed with North East manufacturers and service providers rose again at a moderate rate. Activity growth eased, but the rate of increase was largely in line with its historic trend and the Ƶ average.
“Looking to the future, private sector firms in the North East sent some mixed signals. Headcounts were raised at the quickest rate for 28 months, and one that was the second-strongest of all 12 monitored Ƶ areas. However, optimism about activity levels for the coming year dipped, and North East companies were the least upbeat regionally.”
The survey found that many North East firms increased their charges in June, marking nearly four years of inflation. But there were some signs of growing confidence as the survey’s Future Activity Index registered above the neutral 50.0 mark for the first time in just over a year-and-a-half.
The new Labour Government has made economic growth one of its key missions, and Chancellor Rachel Reeves has used her first major speech to say the Government would make major changes to speed up infrastructure projects and unlock private investment.
She said: “The question is not whether we want growth, but how strong is our resolve? How prepared are we to make the hard choices and face down the vested interests? “How willing, even, to risk short-term political pain to fix Britain’s foundations?”
The Labour manifesto committed to wholesale planning reforms to make it easier to build and a greater focus on driving through key infrastructure projects and boost housebuilding. The manifesto also promised to update planning policy to make it easier to build laboratories, digital infrastructure and gigafactories as well as 1.5m homes.
