Market Update: Entrepreneurs confident in their businesses but cautious about wider economy – Full Analysis

Entrepreneurs across Teesside and the wider North-East remain optimistic about the prospects for their own businesses, despite ongoing concern about rising costs and wider economic uncertainty, according to a new survey.

The quarterly Pulse Survey from the Entrepreneurs’ Forum of more than 100 founders across the region found that 71% are optimistic about their business prospects over the next 12 months, with many reporting strong pipelines, new opportunities, and encouraging levels of demand.

In contrast, the findings also highlight significant pressures facing SMEs. Around 70% of entrepreneurs cite rising costs as their biggest concern, with employment costs, including recent increases in minimum wage and National Insurance contributions, most frequently mentioned.

More broadly, nearly half of respondents say government policy and regulatory uncertainty are affecting business confidence. Changes to employment legislation, taxation and the overall regulatory environment are creating additional challenges for founders planning their next stage of growth.

Cashflow pressures appear to have eased since the previous survey (December 2025), with the proportion of entrepreneurs naming them as a key challenge falling from 33% to 25%, but the underlying picture remains complex. About four in ten entrepreneurs report difficulties converting pipeline opportunities into revenue, citing slower client decision-making and payment terms that extend well beyond traditional timeframes.

Despite these challenges, the survey points to a resilient entrepreneurial community. Three-quarters of respondents expect their turnover to increase over the next 12 months, and more than half anticipate expanding their workforce during the same period.

Elaine Stroud, chief executive of the Entrepreneurs’ Forum, said: “Entrepreneurs are naturally optimistic people, and that optimism really comes through in this survey. Many founders across the North-East are seeing strong sales pipelines, new opportunities, and encouraging momentum.

“At the same time, rising employment costs and economic uncertainty are clearly creating pressure, but what stands out is the resilience of the region’s entrepreneurial community. Even in a challenging environment, founders continue to invest, adapt, and look for new opportunities. And that entrepreneurial energy remains a key driver of growth for the North-East economy.”

The survey also highlights the growing role of technology in business operations. More than 90% of respondents say they are now using artificial intelligence (AI) in some form, most commonly to support productivity, data analysis, marketing and operational efficiency.

The Entrepreneurs’ Forum Pulse Survey is conducted quarterly to capture the views of founders and business leaders across the North-East region and provide insight into the opportunities and challenges shaping the region’s economy.