Chamber president Deb Walton said the findings reflected a “growing sense of relief” among firms
Deborah Walton – President, North East Chamber of Commerce and CFO at Palintest(Image: North East Chamber of Commerce)
Easing cost pressures and more UK-based orders are helping North East firms feel more confident about the months ahead, research from the region’s largest business group suggests.
Leaders responding to the North East Chamber of Commerce’s latest Quarterly Economic Survey – covering the final quarter of 2025 – pointed to falling prices and fewer concerns. However, the uptick in confidence is said to be “fragile” as researchers identified mixed signals about workforces, capacity and exports.
Inflation concerns, as well as worries over staff cost and energy price, all declined.. Some pressures grew or were sustained with concerns about crime, congestion and red tape all up. Manufacturers were identified as the most concerned about taxation and inflation, as service businesses cited taxation as their top concern.
Headline findings around cost pressures included a fall in labour costs, as well as fuel and utilities. Overall business activity measures were mixed with the number of firms operating at full capacity down in the quarter and year-on-year. More firms were exporting over the last quarter, while companies showed more willingness to investment with intentions to buy plant and invest in training both increasing..
Deb Walton, Chamber president, said: “These findings reflect a growing sense of relief among businesses after a prolonged period of pressure. Falling concerns around inflation, staff costs and energy prices are easing day-to-day pressures, allowing firms to plan with greater confidence, supported by rising sales and renewed investment.
“Yet recovery remains fragile. Many businesses are still hesitant to expand their workforce, capacity constraints persist in key sectors, and export activity has not fully recovered. Targeted, practical support will be essential to turn this cautious optimism into long-term resilience for the North East economy.”
Researchers said responses about workforce planning showed cautious improvement with current workforce levels up 6.5% during the quarter, though still 7.1% below last year. Future workforce expectations were down slightly and and recruitment levels softened.
Rhiannon Bearne, deputy chief executive at the Chamber, said: “This quarter’s results show a more encouraging picture for North East businesses. Cost pressures are easing across key areas, helping to stabilise operating conditions, while stronger UK sales, orders and improving investment intentions point to a gradual recovery in demand. However, confidence remains cautious. Workforce indicators are mixed, recruitment activity has softened, and export levels, while improving, still lag behind last year. Businesses need certainty on costs, regulation and investment support if this emerging stability is to be sustained.”
