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  • West Midlands gains momentum in the final stages of 2025
  • Business expectations improve in most areas

 

There were pockets of output growth across the UK in December, offsetting declines elsewhere, the latest NatWest Regional Growth showed.

Expectations for business activity in the year ahead meanwhile improved in the majority of areas, but employment fell across the board.

The Tracker's headline figure is the Business Activity Index. Any reading above 50.0 signals growth, and the further above the 50.0 threshold the faster the rate of growth signalled.

 

Sebastian Burnside, NatWest Chief Economist, said:

“The final report of 2025 has shown that many of the regions can take confidence from the resilience their businesses have shown over the course of the year and the positive impact they have made to the wider UK economy.

“As ever, there were varying trends in business activity in the final month of the year. London finished where it started as the fastest-growing region, while there was a late surge in the West Midlands, which continued to recover from the disruption surrounding the JLR shutdown earlier in the year. These two, along with the South East and South West, drove growth in December.

“Encouragingly, in the majority of nations and regions, business confidence in December was higher than it had been a year earlier, which is hopefully a good omen for growth prospects in 2026.

“The jobs market faced multiple headwinds in 2025, and that continued right through to the end of the year, with December seeing a broad-based decrease in employment as firms generally faced an increase in costs pressures.

“A rise in backlogs of work in four regions, which is the most in over two-and-half years, is perhaps an indication of increasing capacity pressures, which could help support labour market conditions in the coming months.

 

Please see the regional reports in full:

East of England (PDF, 912KB)

East Midlands (PDF, 941KB)

London (PDF, 869KB)

North East (PDF, 878KB)

North West (PDF, 1,220KB)

UK National (PDF, 1,700KB)

Scotland (PDF, 1,535KB) 

South East (PDF, 1,100KB)

South West (PDF, 951KB)

Wales (PDF, 944KB)

West Midlands (PDF, 771KB)

Yorkshire and the Humber (PDF, 2,300KB)

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This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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