Aberdeen & Grampian Chamber of Commerce (AGCC) says there are tentative signs of optimism returning to the North-east economy amid growing hopes that Labour could adopt a more pragmatic approach to the future of the North Sea.
The Chamber's latest Quarterly Economic Survey (QES), delivered in partnership with Gilson Gray LLP, shows modest improvements in domestic trading conditions during the second quarter of 2026, with more firms reporting increased sales and fewer experiencing declining activity than at the start of the year.
While businesses remain under considerable pressure, AGCC believes the survey points to the first signs that confidence may be stabilising after a prolonged period of uncertainty.
The Q2 2026 survey nevertheless highlights the significant challenges still facing businesses across the region. While the gap between the North-east and the wider UK has narrowed, that is as much a consequence of weakening confidence nationally as it is improving conditions locally, with businesses here continuing to face some of the strongest economic headwinds in the country.
Energy costs have also risen sharply. More than seven in ten businesses said utility bills are driving price pressures, while 67% cited fuel costs - both around fifteen percentage points higher than the UK average despite the North-east remaining Europe's energy capital.
As a result, 58% of businesses expect to increase the prices of their goods and services over the next three months, compared with 48% nationally.
While domestic demand has improved, investment confidence remains subdued.
Just 13% of businesses increased capital investment during the quarter, while 37% reduced spending. Investment in workforce training also continues to lag behind the national picture, with firms becoming increasingly cautious about committing to future growth.
The labour market tells a similar story. Although 61% of North-east firms attempted to recruit during the quarter - higher than the UK average - only 15% increased their workforce, while just 13% expect employment growth over the coming three months.
The findings suggest many employers are replacing departing staff or struggling to fill vacancies rather than creating new jobs.
Businesses also continue to operate below capacity, with almost three quarters reporting spare capacity within their operations - significantly higher than the UK average.
Looking ahead, one third of firms expect turnover to increase over the next year, an improvement from 29% on the previous quarter.
Russell Borthwick, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: 'There are genuine reasons to be encouraged by this survey. We've seen domestic trading conditions improve and there are early indications that confidence is beginning to return after a prolonged period of uncertainty.
'Importantly, this comes at a time when the political conversation around the future of the North Sea appears to be changing.
'But these remain green shoots, not a full recovery. Inflation has risen sharply, businesses continue to face significantly higher energy costs than elsewhere in the UK and companies remain reluctant to invest, recruit and expand.
'The survey shows businesses becoming increasingly risk averse. They are waiting for confidence and certainty before committing capital.
'Our members have been remarkably consistent about what they want from government. Their priorities are supporting the energy transition while protecting North Sea jobs and investment, putting economic growth at the heart of policymaking and creating a more competitive tax and business rates system.
'Government now has a real opportunity to build on these early signs of stabilisation. That means restoring fiscal stability, approving key energy projects, supporting future North Sea investment, backing the energy transition while protecting existing jobs, and putting economic growth at the heart of policymaking.'
Findlay Anderson, Partner and Head of Corporate at Gilson Gray LLP, sponsors of the QES, added: 'This survey points to a business community that remains resilient despite continuing economic pressures.
'It is encouraging to see signs that confidence may be stabilising, but businesses continue to face rising costs and remain cautious about future investment.
'Creating the certainty and competitive conditions that allow companies to invest, recruit and grow will be essential if the North-east is to realise its considerable economic potential.'
The Quarterly Economic Survey, delivered locally by Aberdeen & Grampian Chamber of Commerce and nationally coordinated by the British Chambers of Commerce, is recognised by the UK Government, HM Treasury and the Bank of England as one of the UK's leading indicators of business performance and economic sentiment.
Click here to read the report.
Source: Aberdeen & Grampian Chamber of Commerce
