Two business surveys have painted a downbeat picture of trading conditions for some North East firms.
The latest business barometer from Novuna Business Finance found that more than eight in 10 small business owners (84%) in the North East cite barriers holding their firms back from growing, the highest level since seen since 2022.
And a quarterly report on the region’s manufacturing sector found worries over exports, particularly to the US, and output being flat.
The findings from Novuna Business Finance’s Business Barometer highlight market uncertainty, the impact of the cost-of-living crisis and even the ‘long tail’ of Brexit as factors cited by North East business owners. There was also a rise in the number of business owners complaining about the impact of red tape on their businesses, as well as the problems of skills shortages.
Jo Morris, head of insight at Novuna Business Finance, said: “Despite all the recent news on º£½ÇÊÓƵ trade deals, the view from small businesses – the powerhouse of the º£½ÇÊÓƵ economy – is far less congratulatory. Our research shows that the percentage of º£½ÇÊÓƵ small businesses predicting growth this quarter has fallen to a four-year low (29%) – with significant falls in the manufacturing, construction and retail sectors.
“Added to this, we also have a five-year high in the proportion of enterprises that cite barriers holding back their growth. Some of these are local and specific, but many relate to the macro-economic position.
“Nine years on from the referendum, one in five small businesses say they are struggling with the consequences of Brexit. And the dark cloud of US tariffs and sluggish economic growth gives small businesses a level of market uncertainty that is disruptive and hard to plan against.â€
Meanwhile, North East manufacturers have seen a poor early summer, according to a new survey published today by manufacturing body Make º£½ÇÊÓƵ and business advisory firm BDO.
The report showed total orders being stagnant, which has translated into fewer firms wanting to recruit. Investment levels were boosted by activity in the automotive market, however, and there was also a surge in orders for the defence sector.
Dawn Huntrod, region director of Make º£½ÇÊÓƵ in the North, said: “There is no sugar coating the fact that these are very challenging times for manufacturers in the North East who are facing a potent mix of headwinds at home and overseas. It’s now vital that the upcoming Industrial Strategy is bold and ambitious in order to provide companies with some light at the end of the tunnel.â€
Last week saw the biggest monthly contraction for the º£½ÇÊÓƵ economy for a year-and-a-half in April as manufacturing activity pulled back sharply amid a record drop in exports to the US following President Donald Trump’s tariff hikes. Official figures showed gross domestic product (GDP) fell by 0.3% in April, though it had risen a month earlier due to a number of factors.
The latest GDP figures follow a more robust start to the year, when the economy grew by 0.7% – the highest rate of expansion since the first quarter of 2024.
