The North East Chamber of Commerce has released its latest quarterly economic survey (QES) for Q2 2026, revealing encouraging signs for regional businesses alongside persistent cost pressures. The survey, conducted between May 11 and June 8, points to improvements in sales, recruitment, and workforce investment, but firms remain wary of rising energy costs, inflation, and weaker profit forecasts.
Sales and Orders Strengthen
Business activity broadly strengthened, with increases in UK sales, UK orders, and exporting. The proportion of firms operating at full capacity also rose. Training investment plans increased strongly by 13.2%, though plant investment declined by 7.6%. Profitability expectations weakened.
Recruitment Intentions Rise
Future workforce expectations rose sharply, with recruitment across all role types. However, recruitment challenges increased, particularly for semi-skilled, unskilled, and clerical roles. Workforce levels improved slightly on the previous quarter but remained below Q2 2025 levels.
Deborah Walton, president of the North East Chamber of Commerce, said: "This quarter’s results highlight growing confidence among North East businesses, with significant improvements in sales activity, recruitment intentions and investment in workforce development. Businesses are clearly looking ahead, with future workforce plans reaching their highest level for some time and training investment increasing strongly compared with both last quarter and a year ago."
Cost Pressures Intensify
Concerns about price pressures increased across most indicators, most notably fuel (up 23.4%), raw materials (up 18.5%), and utilities (up 9.9%). Despite this growth, most cost pressures remained lower than a year ago, with labour, finance, and other overheads showing annual declines.
Energy price concerns rose significantly, with 58.1% of businesses citing it as an issue. More than half of firms reported taking action to reduce energy costs through efficiency measures and reduced usage. Meanwhile, worries about business rates, crime, and taxation eased, while concerns about energy prices, inflation, and exchange rates all increased.
Policy Stability Needed
Rhiannon Bearne, deputy CEO of the North East Chamber of Commerce, said: "As businesses and communities face further change on the national political stage, stable policy, investment in infrastructure and support for competitiveness will be critical to sustaining this cautious momentum. The North East Chamber of Commerce will continue to champion the needs of North East businesses and ensure their experiences help shape policy not just regionally but, through our strong partnership with the British Chambers of Commerce, nationally as well."
