The North East private sector economy contracted for the third month running as inflationary pressures and fears over a recession weighed on businesses, an influential survey has said.
The NatWest North East Business Activity Index, which measures output of the region’s manufacturing and service sectors – posted a score of 46.8 in September, with the North East showing a steeper drop in business activity than that recorded nationally. Companies in the region saw a seventh consecutive month of decreases in new work as firms reported that the cost-of-living crisis and worries over an economic downturn were dampening demand.
Company expenses continued to rise in September – taking the sequence of inflation to 28 consecutive months – with food and drink, energy, labour and transportation costs rising particularly. Companies attributed the inflationary pressures they were facing to Brexit, the war in Ukraine and the depreciation of the pound.
