The latest NatWest UK Growth Tracker revealed an increase in private sector output across ten out of the twelve monitored nations and regions, a slight improvement from the nine recorded in June.
The Business Activity Index, a key monthly indicator of regional economic health, tracks changes in the output of goods and services within the private sector. A reading above 50 indicates growth, with higher numbers signaling faster expansion.
In July, Northern Ireland led the UK in business activity growth for the second time in three months, closely followed by the South West, which experienced its most significant output increase in over two years. In contrast, Wales and the East Midlands saw modest declines in business activity.
Sebastian Burnside, NatWest’s Chief Economist, commented on the findings:
“July’s Growth Tracker report showed an encouraging rise in the number of UK nations and regions reporting higher business activity, marking a positive start to the second half of the year. Beyond the headline numbers, there were further signs of improvement.
“A notable increase in regions reporting greater inflows of new work in July signals a pick-up in underlying demand and coincides with greater optimism about the future in almost all areas. Northern Ireland was the exception, with a slight softening in growth expectations, possibly reflecting its strong performance in July.
“Northern Ireland not only recorded the fastest increase in business activity at the start of the third quarter but also the most significant rise in employment.
“In July, the highest number of regions reported increases in employment in over a year, with only two of the twelve areas monitored seeing weaker labor market performances.
“Price pressures remain above the long-term trend in most areas. It will be interesting to observe how this evolves following the Bank of England’s first rate cut in more than four years at the beginning of August.”
Demand
The data showed a rise in the number of nations and regions reporting higher inflows of new business, increasing from six in June to eleven in July. This improvement reflected renewed growth in the East of England, Scotland, the South East, Wales, and Yorkshire & Humber. The South West recorded the most significant increase in new work, with growth accelerating to its highest level since March 2022.
