North East Economy Demonstrates Robust Growth in Recent Business Surveys
Two highly respected surveys have highlighted a significantly more optimistic outlook for the North East economy, positioning the region among the best performing areas in the United Kingdom. The separate reports from NatWest and KPMG provide compelling evidence of renewed economic vitality and increasing business confidence across the North East.
NatWest Growth Tracker Reveals Accelerated Expansion
The latest NatWest Growth Tracker data indicates a notable resurgence in output among firms based in the North East, with growth rates ranking among the fastest observed across the UK. This tracker, which meticulously measures changes in the region's manufacturing and service sectors, increased from 49.5 in December to 54.4 in January. This rise signals a welcome increase in business activity for the first time in three consecutive months.
Out of the twelve monitored UK regions and nations, nine recorded a rise in output. The North East, alongside the West Midlands, experienced the second-fastest expansion, trailing only behind London. Private sector companies in the North East also reported a steeper increase in new business intakes, while overall business confidence soared to its highest level in more than four years.
Employment levels remained stable, according to NatWest, but numerous companies in the region are actively considering increasing their workforce to manage rising demand effectively.
Malcolm Buchanan, chair of the NatWest North Regional Board, commented: "North East-based companies were buoyed by stronger optimism and higher new order inflows to raise activity levels for the first time in three months at the start of 2026. Output rose at the fastest pace since last August, and was behind only London in terms of growth leaders across the 12 monitored UK regions and nations."
He added: "The near and medium-term pipeline is also positive for the North East region, with growth in new business intakes reaching a three-month high, while outstanding business continued to accumulate - signalling pressure on capacity amid growing demand. Looking further ahead, companies were confident that positive trends would continue over the coming 12 months. The overall degree of confidence surged from the end of last year to reach the highest since May 2021. Moreover, local firms were among the most optimistic of the monitored UK areas, with only London-based companies recording a stronger degree of optimism."
KPMG Report Highlights Exceptional Business Confidence
Simultaneously, a comprehensive report from Big Four accountancy group KPMG suggests that an impressive 92% of private business owners in the North East are confident about growth prospects in 2026. This figure represents the highest level of confidence of any Northern region. KPMG's annual Private Enterprise Barometer places business confidence in the North East five percentage points above the national average.
Rising demand for products was identified as the primary driver behind this growing positivity. Additionally, many businesses highlighted ambitious plans to expand into new markets and launch innovative products to capitalize on emerging opportunities.
Michael Downes, senior partner for KPMG at its Newcastle office, stated: "Leading the Northern regions in confidence reflects not only resilience, but a determination from the businesses in the North East to invest in the future. It's particularly encouraging to see businesses across the region increasingly looking beyond domestic markets, with appetite for international expansion well above the national average."
He continued: "That confidence is being reinforced by continued investment in technology and AI at home, supported by major developments such as the North East's AI Growth Zone, which is helping to drive innovation, skills development and job creation across the region. With technology, diversification and a growing openness to alternative funding all shaping growth strategies, the North East's private businesses are showing the ambition and forward-thinking needed to compete on the international stage."
The combined findings from these two authoritative surveys paint a remarkably positive picture for the North East economy. With strong output growth, surging business confidence, and strategic investments in technology and international expansion, the region is firmly establishing itself as a dynamic and competitive force within the UK economic landscape.
