Chamber survey highlights business resilience in challenging trading environment
The Chamber’s latest QES was unveiled yesterday at the inaugural British Chambers of Commerce Growth Roadshow, held at The Glasshouse International Centre for Music in Gateshead.
Improvements in current workforce levels, investment activity and future profitability were offset by weaker UK sales and orders, declining recruitment intentions and increased concerns around crime, taxation and business rates.
- Price pressures were mixed, with other overheads increasing by 9.7%, while raw material, fuel and labour cost pressures decreased.
- UK sales and orders fell by 10.6% and 9.2% respectively compared with the previous quarter, although both remained above last year's levels.
- Current workforce levels increased by 14.7% quarterly, while future workforce plans declined by 10.4% and recruitment intentions weakened.
- Investment and profitability provided positive signs, with plant investment rising by 3.4% on the previous quarter and future profitability expectations increasing by 11.3%.
- Business concerns around crime (+12.2%), taxation (+8.8%) and business rates (+6%) increased, while 54% of respondents identified energy prices as a concern.
Natasha McDonough, president at North East Chamber of Commerce, said: “This quarter’s QES highlights the resilience of North East businesses in a challenging operating environment. Businesses continue to show their determination to invest and plan for future growth, despite ongoing uncertainty and pressures on costs and demand.”
Price pressures and concerns
Price pressures were mixed, with increases in other overheads (+9.7%), finance costs (+1.6%) and utilities (+1.4%). However, raw material, fuel and labour cost pressures decreased. Year-on-year, most price pressures have eased, particularly labour costs (-17.3%), although fuel costs increased by 11.8%.
Concerns around crime, taxation and business rates increased this quarter. However, most concerns have eased over the past year, particularly inflation (-20.3%) and taxation (-18%).
Workforce and business activity
Current workforce levels increased by 14.7% quarterly and 18.5% year-on-year. However, future workforce plans declined by 10.4%, alongside weaker recruitment intentions for full-time and part-time roles. Recruitment difficulties decreased across all job categories.
Business activity and investment
UK sales and orders weakened this quarter but remained above last year's levels. Meanwhile, plans for future plant investment increased by 25.7% year-on-year and training investment plans rose by 17.3% year-on-year. Meanwhile, future profitability expectations strengthened by 11.3% compared to the previous quarter and by 8.6% year-on-year.
Businesses reporting export activity declined by 8.9% compared with last quarter, although it remained 7.3% above last year's level. Manufacturing businesses continued to report significantly higher export activity than service providers, at 82.4% and 22.9% respectively.
Energy
Energy prices remained a concern for 54% of respondents, while 62% of businesses reported taking action to reduce energy expenditure. The most common measures included encouraging staff to improve efficiency, reducing energy usage and investing in energy-efficient equipment. Businesses also reported increased activity in switching energy tariffs and investing in energy efficiency measures.
Overall, the Q3 2026 results point to a mixed outlook for North East businesses. Stronger current workforce levels, investment and profitability expectations offer some encouragement, but weaker sales, declining recruitment intentions and continued concerns around costs and taxation suggest businesses remain cautious about the months ahead.
Rhiannon Bearne, deputy CEO at North East Chamber of Commerce, said: “The Budget is an important opportunity for government to address the barriers businesses face and give them greater confidence to invest and trade.
The Chamber will continue to champion the priorities of North East businesses and ensure their experiences inform policy discussions at both regional and national levels.”