North West businesses report challenging conditions, finds NatWest survey

Latest NatWest Growth Tracker survey results showed a reduction in business activity across the North West at the start of the second quarter of 2025.

Firms have reported that increased global economic uncertainty, particularly related to US tariff announcements, is significantly impacting demand, with businesses observing reduced client activity and caution towards spending.

The report’s headline North West Business Activity Index registered below the 50.0 no-change level for the seventh month running in April. Its latest reading of 46.7 was down from 49.5 in March and the lowest recorded for more than four years. April also saw employment fall for the seventh month in a row and at the fastest rate since November 2020.

The survey was conducted after US tariff announcements on 2nd April, which, at the time, saw minimum tariff rates of 10% applied to imports from the UK into the US.

Despite the negative outlook on the current economic conditions, companies in the North West generally anticipated a rise in output over the next 12 months, but they had revised down their growth expectations to the lowest for two-and-a-half years.

Sebastian Burnside, Chief Economist at NatWest, said:  

“The tracker this month reflects the challenges that economic uncertainty can create for UK businesses of all scales. 

“Firms across the UK reported a challenging start to the second quarter, with demand for goods and services falling in all areas amid this backdrop of economic volatility and rising prices. The South West was alone in recording growth in business activity. 

“It’s encouraging that firms are still looking to the future with some optimism, although growth expectations are lower than they have typically been in the past. 

“Rising labour costs have added to pressure on businesses, following April’s increases in National Insurance contributions and minimum wages. As firms look to mitigate rising costs, we’ve seen average prices charged for goods and services increase at faster rates, as well as a greater focus on workforces. Labour markets in all areas of the UK have felt the impact to some degree in recent months, with only Scotland avoiding a fall in employment in April.” 

“We cannot ignore the backdrop during which this survey was carried out but regardless, as we’ve seen in the past, UK business is resilient and can always offer reasons for optimism throughout.”