North West economy ends quarter on a stable footing, finds NatWest tracker

Business activity stabilised across the North West private sector in June, following a decline in output in recent months, the latest NatWest Growth Tracker survey has revealed.

The headline North West Business Activity Index – which measures changes in the region’s output of goods and services – came in at 50.0 in June, registering in line with the threshold that separates growth from contraction. It marked an improvement from May’s 49.5 and ended a sequence of declining activity levels stretching back to October last year.

Alongside a shift away from contraction in output at the end of Q2 of 2025, firms in the region also reported a slowdown in cost increases. The NatWest survey data also revealed a slowdown in price rises being charged by businesses in the North West for goods and services.

Malcolm Buchanan, Chair of the NatWest North Regional Board, said:

“The tide might be turning for the North West, with business activity in the region having stabilised in June after a downturn in recent months. There are tentative signs of a recovery in demand as firms reported the smallest drop in inflows of new work for eight months.

“Further encouragement can be gleaned from a cooling of inflationary pressures, with business cost rising at the slowest rate so far this year and the pace of increase in prices charged for goods and services now back below the long-run average.

“Employment has continued to fall, but with hiring policies tending to take some time to adjust, there’s hope that the more positive trends in activity and new business will soon start to spillover to the labour market.”

Firms in the North West continued to look to the future with optimism. There were hopes among surveyed firms that new products, entry into new markets and the securing of new business currently in the pipeline would boost activity in the coming year. Expectations moderated from May’s recent high, but they remained above the national average.

June data indicated a ninth consecutive monthly decrease in workforce numbers across the North West private sector, NatWest found. The pace at which staffing levels fell was unchanged from the previous month. It was also one of the fastest recorded across the UK, exceeded only by those seen in Yorkshire & Humber and the East of England.  

The decline in employment was consistent with signs of excess capacity across the North West private sector. Firms once again completed more orders than were received during June, leading to a further decline in backlogs of work. The pace of depletion remained sharp and was one of quickest seen across the UK, despite it having slowed slightly to the weakest for six months.

Beyond the North West, the UK as a whole saw output growth accelerate to a nine-month high, driven by expansions in business activity across eight of the 12 nations and regions monitored by the survey.