- South East records one of the strongest growth performances in the UK
- Business confidence strongest of all UK regions
- Demand continues to rise as firms look ahead positively
South East businesses entered the final quarter of 2026 on a positive footing, according to the latest NatWest South East Growth Tracker.
Output and demand continued to rise during September, while business confidence reached its highest level since January and topped all other UK regions and nations.
The headline South East Business Activity Index stood at 52.6 in September, broadly unchanged from 52.7 in August and signalling a sixth consecutive month of growth in private sector output. Firms linked higher activity levels to new contract wins, improving client demand and stronger order books.
New business also increased for a third successive month, supported by improving demand, growing client confidence and successful marketing activity. Although growth eased slightly from August, it remained stronger than the UK-wide trend.
Business confidence strengthened significantly during September. Firms cited plans to attract new customers, launch new products, increase marketing activity and build on healthy sales pipelines as reasons for optimism heading into the final quarter of the year.
While businesses continued to face higher fuel, transport and raw material costs, many were able to protect margins by passing on some of those increases through their prices.
Catherine van Weenen, NatWest's Regional Managing Director, Commercial Mid-Market, for London & South East, said:
"The South East enters the final quarter of the year with real momentum behind it. Businesses are continuing to win new work, demand is improving and confidence is stronger here than anywhere else in the UK.
"It's encouraging to see firms looking ahead with growing optimism, supported by healthy pipelines and plans to invest and grow. While cost pressures remain a challenge, businesses across the region are showing resilience and are entering the final months of the year from a position of strength."
Performance in relation to UK
Although moderate in nature and one of the strongest of the 12 UK areas (behind London and Northern Ireland), the upturn in output was the weakest in three months. Growth in new business was also the least marked in the third quarter, though it was stronger than the UK-wide trend.
The level of confidence rose to its highest since the start of the year and was the strongest of the 12 monitored UK areas.
Latest data marked the fourth reduction in payroll numbers at South East companies in as many months. The rate of job losses was only modest in nature, but it was the most pronounced since February and stronger than the UK average.
South East private sector businesses signalled a further drop in volumes of backlogged orders at the end of the third quarter, thereby stretching the current trend of reduction to eight months. Compared to the national average, the local drop in work outstanding was only mild.
On prices, the rate of cost inflation was the strongest seen across the third quarter, though was broadly in line with the UK-wide trend. The rate of selling price inflation, although less marked than that of costs, was substantial and more pronounced than the national average.
