Chamber survey reveals challenging outlook

Businesses across the North East are facing increasing pressure as rising costs, recruitment challenges and declining sales weigh on the region’s economic outlook, according to the latest Quarterly Economic Survey from the North East Chamber of Commerce.

The Chamber’s survey – the largest independent business survey of its kind in the UK – captures the sentiment of the North East business community, with the quarter 4 2024 results presenting a challenging outlook for the region’s businesses. 

Labour costs remain the biggest concern, with 76.3 per cent of businesses reporting wage pressures - a 7.4 per cent increase from the previous quarter. 

Energy costs are also a major issue for 52 per cent of firms, while recruitment struggles have intensified, particularly in manufacturing and professional services. 

The demand for full-time staff has also dropped, with businesses turning to part-time and temporary roles instead.

Meanwhile, domestic sales have taken a hit, falling by 13.2 per cent compared to last quarter and down 25.3 per cent year-on-year. 

The report also notes that export activity has declined, with fewer businesses trading internationally, while investment plans have been scaled back, with plans for plant investments and training down sharply.

Rhiannon Bearne, executive director of policy and representation and deputy chief executive officer at the North East Chamber of Commerce, said: “For our members and stakeholders in the North East, this quarter’s findings arrive during a new year in which they are being presented with a number of economic pressures, including increases to national insurance contributions.

“While some businesses report positive momentum in areas such as recruitment, concerns around staff costs, taxation and energy prices are increasingly prominent.

“The continued decline in reported levels of UK sales and exports underscores some of the fragility of current trading conditions.

“These insights make it clear that our work as the North East Chamber of Commerce – amplifying the voice of the region’s businesses and advocating for change at all levels of government – remains more crucial than ever.”

Despite these challenges, businesses are taking steps to manage energy costs, with 76.3 per cent adopting efficiency measures. However, interest in local energy generation, such as solar panels, has declined.

Natasha McDonough, Chamber vice president, added: “This quarter’s survey comes at a critical juncture for the North East business community, with the results indicating both resilience and concern. 

“While businesses are taking proactive steps to address energy efficiency and staff recruitment, the October Budget has added a layer of complexity for businesses, showing concerns around taxation and operational costs.

“These policy changes are set against a backdrop of continued inflationary pressures and challenging trading conditions, as evidenced by the Q4 data.

“The Chamber remains committed to advocating for the policies and support systems businesses need to thrive. 

“Together, we will navigate these challenges and work toward a brighter future for our region.”

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