NatWest Regional Growth Tracker

Improved business growth in some UK regions in March but economic uncertainty continues  

 Key Findings

• London and South West led regional growth with upturns seen in South East and Yorkshire & Humber during March
• Challenges experienced in January and February for Scotland and Northern Ireland remain
• Market conditions remain challenging and we could see continued challenges in the coming months

March’s NatWest Regional Growth Tracker showed improved business growth in more regions of the UK at the end of Q1 – but the majority are still being affected by wider economic uncertainty.

The Tracker – which surveyed businesses operating in the manufacturing and services sectors across 12 regions of the country from March 12 to 27 – showed London and the South West led business growth last month, with improvements seen in the South East and Yorkshire and Humber.

As witnessed in January and February, most regions in March experienced a dip in business activity as inflationary pressures remained elevated, with Scotland and Northern Ireland the worst affected.

The NatWest Regional Growth Tracker Business Activity Index is the first fact-based indicator of regional economic health published each month. A reading above 50 signals growth, and the further above the 50 level the faster the expansion signalled.

Of the 12 UK regions, only five posted above 50. The average across the UK for March was 51.5.

Commenting on the Tracker’s findings, Sebastian Burnside, NatWest Chief Economist, said:

“According to March’s report, London continued to lead in March, with the South West also making a sizeable contribution to UK economic growth. We saw growth broaden out slightly, as both the South East and Yorkshire & Humber enjoyed renewed upturns in business activity.

“Market conditions remain challenging and recent tariff announcements suggest we could see continued challenges in the coming months.

“Firms up and down the country are looking to control costs, which is feeding through to staffing decisions.

“Price pressures remain high across the board, though they did at least subside slightly in most areas in March, on the eve of the changes to national insurance contributions and national minimum and living wages.”