The percentage of North East-based small businesses predicting growth for the next three months has risen sharply since the start of the year from 22% in January to 33% for April. This is the highest figure in the North East for 12-months - and the biggest quarter-on-quarter rise anywhere in the UK, according to new research from Novuna Business Finance.
Percentage of North East-based small businesses predicting growth each Quarter over the last year
|
Q1 2026 |
22% |
|
Q4 2025 |
24% |
|
Q3 2025 |
29% |
The findings are from the Business Barometer study by Novuna Business Finance, which has tracked small business growth outlook every quarter since 2015. The new data also suggests early signs of a north-south divide emerging for the summer months. In addition to the rise in the percentage of small businesses predicting growth across the North East, there was a similar rise in the North West, with small business growth forecasts up from 22% to 26% since last quarter. In contrast, the percentage of small businesses in London predicting growth fell (from 40% to 37%). The same was true in the South East, with growth forecasts falling from (23% to 21%).
These rising growth forecasts from North East-based small businesses are all the more impressive given the challenging context in which many enterprises operate. The Novuna Business Finance findings come at a time when more than two thirds of North East small businesses (68%) fear disruption to their enterprises that will result from current geo-political and economic uncertainty. Of those that expressed concerns:
- 38% of small businesses feared the impact the Middle East war would have on their business and supply chain. This rose sharply to 70% for small businesses in the transport and distribution sector, 68% for those in the agriculture sector and 61% of manufacturing small businesses.
- 20% of respondents in the North East said they still feared the potential impact of US tariffs on the UK.
- 11% of small businesses also said that the war in Ukraine and instability in the broader region would impact their business and supply chain.
- As a result of all this uncertainty on the UK economy, 74% of North East-based small businesses said they feared the prospect of the UK Government raising UK taxation later in the year.
These findings follow Novuna Business Finance research in March on rising energy prices, after the outbreak of war in the Middle East region, which revealed that small businesses estimated their transport costs would increase by an average of £753.56 a month, and the cost of running machinery estimated to rise by an average of £785.92.
Sabrina Ahmed, Head of Customer Engagement at Novuna Business Finance comments: "After 10 years of tracking small business outlook across the North East, it is positive to see a rise in small business growth forecasts despite the seriousness of current worries over energy prices, the fear of future tax rises and general macro-economic uncertainty. We have learned so far this year that many small businesses are working hard to reduce fixed costs, free up working capital and are taking steps to diversify their business. All these practical steps are supporting a rise in the number of North East businesses predicting growth over the next three months. Novuna Business Finance is committed to supporting established enterprises with funding that will help them navigate market uncertainty and power future growth."