Back to main menu
Search
Search
Overlay

Key Findings

  • Wales and East of England lead growth in May
  • Companies optimistic about opportunities for the year ahead
  • Scottish employment remains resilient

 

May's NatWest Regional Growth Tracker showed renewed increases in business activity across several parts of the UK, alongside a general revival of firms' growth expectations for the coming year.       

The Tracker – which surveyed businesses operating in the manufacturing and services sectors across 12 regions of the country – showed improvements in growth expectations in every area, with that half of the 12 UK nations and regions covered by the report saw a rise in business activity in May.

This positivity has had an impact in terms of thoughts for the future. Business confidence towards future activity improved across the board in May. The North West saw the greatest increase in expectations since April, followed closely by London. The highest overall degree of optimism was recorded in the West Midlands.

Rates of business activity expansion were positive for most of the country, including Wales which was the fastest growing area for May. London experienced its weakest performance in 30 months.

Employment proved challenging in almost every region. The exception was Scotland which experienced its first upshift in employment in six months.

 

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

“The rebound in business confidence in May suggests that firms might be in a stronger position for the next quarter.

“Certainly, a positive May has driven a sharp increase in optimism, reflecting the recovery from the wider economic uncertainty businesses were feeling across March and April.

“This latest survey data suggests businesses are taking steps to improve their productivity. Some of this is being driven by pressure from their bottom lines, specifically increased labour costs following April’s national insurance changes.

“Nonetheless, it is positive to see that Scottish firms remain resilient and have experienced an uptick in their employment – the first of 2025.

"We're still seeing businesses raise prices as they look to mitigate increased costs. Rates of inflation have pulled back from April's highs, but cost pressures remain historically elevated.”

Demand

Of the 12 nations and regions monitored, only Wales recorded an increase in inflows of business in May. Demand stabilised in the East of England, after falling in the previous five months, but it decreased in all remaining areas. East Midlands recorded the most marked drop in new work and was one of four regions where the rate of decline accelerated.        

                                                

Employment

The majority of areas saw a decrease in employment in May. The steepest decline was seen in the North West, where workforces have now fallen for eight months in a row, although the pace of job shedding there slowed compared to April. Scotland went against the trend and recorded a fractional uptick in staffing levels, its first for six months.

 

Capacity

Backlogged orders (i.e. the volume of orders or projects awaiting completion) fell across all 12 nations and regions in May, the third month in a row in which this has been the case. Pressure on capacity was weakest in the North West, where outstanding business fell sharply and slightly quicker rate than in April. Firms in Scotland recorded the slowest fall in work-in-hand.    

 

Inflation

The rate of increase in average prices charged by businesses for goods and services slowed in all parts of the UK in May, following spikes in inflation in April. The greatest slowdown in output price rises was seen in Wales, where it hit a five-month low. Inflationary pressures were highest in Northern Ireland and West Midlands, respectively.                     

Firms in the South West recorded the steepest rise in input prices midway through the second quarter, followed closely by their counterparts in the East of England. At the other end of the scale, Scotland saw the slowest increase. In all areas, rates of cost inflation eased compared to April but remained above their long-run averages.    

NatWest Regional Growth Tracker

Download the latest NatWest Regional Growth Tracker for May 2025.

Download

Contact

NatWest

Jonathan Rennie

Regional Media & Campaigns Manager

+44 7769 932 102

jonathan.rennie@natwest.com

 

S&P Global Market Intelligence

Phil Smith

Economics Associate Director

+44 1491 461 009

phil.smith@spglobal.com

 

Hannah Brook

EMEA Communications Manager

+44 7483 439 812

hannah.brook@spglobal.com

press.mi@spglobal.com

 

Notes to editors

Methodology

The NatWest UK Regional Growth Tracker data are compiled by S&P Global from responses to questionnaires sent to companies that participate in S&P Global's UK PMI surveys. S&P Global compiles data for Scotland, Wales, Northern Ireland and nine English regions*.

Survey responses are collected in the second half of each month and indicate the direction of change compared to the previous month. A diffusion index is calculated for each survey variable. The index is the sum of the percentage of ‘higher’ responses and half the percentage of ‘unchanged’ responses. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.

The headline figure for each region is the Business Activity Index. This is a diffusion index calculated from a single question that asks for changes in the volume of business activity (at service providers) or output (at manufacturers) compared with one month previously. The Business Activity Index is comparable to the UK Composite Output Index.

The survey data for May were collected 12-28 May 2025.

For further information on the survey methodology, please contact economics@spglobal.com.

*International Territorial Level 1 definitions.

 

About PMI

Purchasing Managers’ Index™ (PMI®) surveys are now available for over 40 countries and also for key regions including the eurozone. They are the most closely watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to www.spglobal.com/marketintelligence/en/mi/products/pmi.

 

About S&P Global (NYSE: SPGI)

S&P Global provides essential intelligence. We enable governments, businesses and individuals with the right data, expertise and connected technology so that they can make decisions with conviction. From helping our customers assess new investments to guiding them through ESG and energy transition across supply chains, we unlock new opportunities, solve challenges and accelerate progress for the world.

We are widely sought after by many of the world’s leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world’s leading organizations plan for tomorrow, today. www.spglobal.com.

 

Disclaimer

The intellectual property rights to the data provided herein are owned by or licensed to S&P Global and/or its affiliates. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without S&P Global’s prior consent. S&P Global shall not have any liability, duty or obligation for or relating to the content or information (“Data”) contained herein, any errors, inaccuracies, omissions or delays in the Data, or for any actions taken in reliance thereon. In no event shall S&P Global be liable for any special, incidental, or consequential damages, arising out of the use of the Data. Purchasing Managers’ Index™ and PMI® are either trade marks or registered trade marks of S&P Global Inc or licensed to S&P Global Inc and/or its affiliates.

This Content was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global. Reproduction of any information, data or material, including ratings (“Content”) in any form is prohibited except with the prior written permission of the relevant party. Such party, its affiliates and suppliers (“Content Providers”) do not guarantee the accuracy, adequacy, completeness, timeliness or availability of any Content and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such Content. In no event shall Content Providers be liable for any damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with any use of the Content.

The information contained in our press releases is intended solely for journalists and media and should not be used by consumers to make financial decisions. Terms and conditions apply to any products or services mentioned in our press releases.

Related press releases

All stories & press releases
scroll to top