The latest NatWest Growth Tracker showed a subdued end to 2025 for the North West’s private sector economy, although business expectations for the year ahead remained positive, reflecting hopes of a recovery in market conditions.
The high street bank’s headline North West Business Activity Index – which measures changes in the region’s output of goods and services – registered 46.6 in December. This was down slightly from November’s reading of 46.9. A reading below 50 signals contraction.
In December, firms operating in the North West maintained a preference for lower workforce numbers, which they attributed to cost pressures and lower sales. However, employment did fall at a slightly slower rate than the month before.
Malcolm Buchanan, Chair of the NatWest North Regional Board, said:
“Continuing the trends seen throughout much of 2025, business activity and hiring remained relatively subdued across the North West in December.
“Despite a challenging end to last year, which was hampered by heightened levels of business uncertainty, firms remain optimistic about their growth prospects in 2026.
“One thing worth keeping a watchful eye on in the coming year is inflation, given the potential for lower interest rates to help spur growth.
“Price pressures ticked up again in December, with firms reporting a steep and accelerated increase in cost, alongside a faster rise in charges for goods and services.”
Firms in the North West continued to face challenging demand conditions in December, with a further decrease in inflows of new work being reported. However, the rate of decline was slower than the month before. The result contrasted with an increase in new work at the UK level.
Business expectations softened slightly across the North West in December, easing to their lowest for eight months. Nevertheless, firms generally anticipated an increase in business activity over the year ahead, reflecting hopes of a recovery in market conditions and plans for new products.
