The North East has seen a notable fall in business confidence this quarter, reflecting the impact of economic uncertainty, rising costs and geopolitical pressures on firms across the region.
Recent reports that Nissan is set to close a production line at its Sunderland plant will add to concerns, not only for the automotive sector but for the extensive network of suppliers and businesses that depend on it. Given Nissan's importance to the regional economy, any reduction in production capacity is likely to have a knock-on effect on confidence, investment decisions and activity across the wider supply chain.
While the region's businesses remain resilient, the latest Business Confidence Monitor (BCM) findings underline challenges many firms are facing as they look ahead.
- According to the latest BCM, business confidence in the North East fell from +2.1 in Q1 2026 to -10.2, but remained above the UK average (-14.6). Companies reported strong annual domestic sales growth and are upbeat about prospects for the coming year, however exports growth is set to weaken. Labour costs were the most widely cited rising challenge, followed by the tax burden.
- Lloyds bank also reports a drop in confidence: "Many are still dealing with a mix of higher costs, uncertain demand and a wider global backdrop that feels difficult to read. That is weighing on decision making, particularly for firms that are focused on the UK market and have fewer ways to offset those pressures."
- Feedback from recent ICAEW events showed the usual concern about rising staff costs, regulatory burden and geopolitical uncertainty.
BCM report
Read the full North East Business Confidence Monitor report for the detailed survey findings and regional economic analysis
