North East private sector stays in growth despite drop in job numbers

The NatWest Growth Tracker Business Activity Index pegs the region as one of the best performers in the UK

A survey that tracks the health of the region’s private sector companies has remained in growth despite a fallback in activity in June.

The NatWest North East Growth Tracker Business Activity Index, which measures month-on-month changes in the region’s manufacturing and service sectors, declined to 50.8 in June, having stood at 53.8 in May. Scores above 50 denote a growing economy.

The North East outperformed the UK as a whole, however, where activity fell in June. Among the 12 monitored UK regions and nations, only London and the South East recorded better trends for activity.

Within the survey, business confidence strengthened in the North East in June, with optimism regarding output over the coming year rising to a three-month high. Cost pressures receded, according to businesses responding to the survey, while the rate of input price inflation eased to its lowest since February.

But there were concerns at job losses, which came at the steepest levels since November last year and were sharper than the UK average.

Malcolm Buchanan, chair of the NatWest North regional board, said: “The North East saw growth momentum falter as the first half of 2026 drew to a close, according to the latest NatWest Growth Tracker. New business placed with private sector firms increased for the seventh month running, but the rate of growth slowed to a fractional pace that was the weakest over this period and contributed to a much slower rise in overall business activity.

“Nonetheless, the region remained one of only three monitored UK areas to record growth in June, alongside London and the South East. This relative resilience helped support confidence among private sector firms, with optimism about the year ahead rising to a three-month high.

“Companies also reported a further easing in cost pressures at the end of the second quarter. The rate of input cost inflation fell to its lowest since February, though it remained high by historical standards. Firms continued to raise their own charges at a marked, albeit softer, pace as they sought to protect margins from elevated cost burdens.

“At the same time, businesses moved to protect cashflow by controlling expenditure elsewhere. Employment fell at the sharpest pace since November last year, underlining the pressure firms continue to face even as demand remains in positive territory.”

The release of the growth tracker has come ahead of some key economic data showing the state of the regional economy. Unemployment and labour market data will be published next Tuesday, including regional data, followed by national inflation data the next day.