The North East economy is showing signs of improvement after seeing its first increase in activity in 10 months, according to a recent business survey. The NatWest North East PMI Business Activity Index, which measures changes in the region’s manufacturing and service sectors, rose from 47.5 to 50.2 in March. While this is a positive development, the North East still ranks as one of the weakest performing regions in the UK, with only Yorkshire and Humber experiencing a downturn.
The survey revealed that new business for companies in the region continued to decline, with nearly a year of consecutive monthly decreases in demand for North East goods and services. This drop was attributed to challenging economic conditions and subdued customer confidence in the UK.
On a more positive note, companies in the North East increased their staffing levels in March, marking the first growth in nine months. However, firms also faced rising cost burdens, particularly in transport costs, which were passed on to customers.
Despite these challenges, businesses in the North East remain cautiously optimistic about the year ahead, although sentiment is at its lowest level in the UK. Malcolm Buchanan, chair of the NatWest North regional board, acknowledged the tough operating conditions for North East companies but noted some “faint glimmers of hope” in the recent data.
The survey results align with a recent quarterly economic survey from the North East Chamber of Commerce, which highlighted a mixed picture of the region’s economic health. As official figures on inflation and regional unemployment are set to be released, further insights into the North East’s economic recovery will be revealed.