Businesses across Aberdeen and Grampian are experiencing “severe and sustained pressure,” according to the latest quarterly economic survey from the Aberdeen and Grampian Chamber of Commerce (AGCC), conducted in partnership with Gilson Gray LLP. The report for the first three months of 2026 reveals a significant and “unfavourable divergence” between the region’s economic performance and the broader UK picture.
The survey highlights that only 10% of businesses in the North East expanded their workforce in Q1 2026, marking the lowest figure since the height of the pandemic. This stands in stark contrast to the UK average, where almost a quarter (22%) of firms increased their headcount despite national economic challenges. Similarly, just 17% of North East businesses reported increased sales during the period, compared to 32% across the UK. Almost half (45%) of businesses in the region saw sales decrease in the first quarter, while the figure for UK businesses was 26%.
Analysis by the AGCC suggests that “much of the region’s underperformance reflects the ongoing contraction in oil and gas,” a trend that has led to falling confidence and delayed investment, impacting supply chains, employment, and spending power across the North East.
Cost pressures, particularly concerning labour, utilities, and raw materials, are reported to be significantly higher for businesses in Aberdeen and Grampian than for their UK counterparts. Furthermore, issues related to taxation and business rates are identified as key impediments to growth.
A notable finding from the report is the widespread dissatisfaction with government support, with over 90% of businesses expressing negative views on both the UK and Scottish Governments’ ability to foster economic growth in the North East over the past five years.
Russell Borthwick, Chief Executive of the AGCC, commented on the findings:
“This latest survey continues to tell a cautionary and concerning story of the North-east economy, with results once again showing a clear and growing gap between our region and the rest of the UK. While businesses across the country are facing headwinds, the scale of divergence we are seeing here points to something structurally different.”
“That is why growth must now become the top priority. Government should be doing everything possible to unlock investment, strengthen confidence and create jobs.”
Borthwick highlighted a “£17.5 billion of potential North Sea investment reportedly ready to go,” an offer made to Chancellor Rachel Reeves by operators earlier this month. He insisted that “ministers have a major opportunity in front of them” and that “Grabbing that opportunity would support employment, boost supply chains, improve energy security and generate substantial value for the wider UK economy.”
Findlay Anderson, partner and head of corporate at Gilson Gray LLP, emphasised the region’s importance:
“The north east remains one of the UK’s most important economic regions, with world-class strengths in energy, technology and international trade.”
However, he warned, “without greater certainty and a more competitive operating environment, there is a real risk that investment and opportunity will continue to flow elsewhere. Rebuilding confidence and creating the conditions for growth must now be a priority.”
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Scottish Conservative energy spokesman Douglas Lumsden attributed the challenges to “reckless policies” that have “decimated Scotland’s oil and gas sector.”
In response, a UK Government spokesperson affirmed its commitment to managing existing oil and gas fields while “actively scaling up clean energy industries in the North Sea,” noting that “Since July 2024, over £90 billion of private investment has been announced into the UK’s clean energy industries.”
Karen Adam, SNP candidate for Banffshire and Buchan Coast, criticised Labour’s energy policies, claiming they are “hammering Scotland and especially the North East” and causing investment to be “stifled and jobs lost.”
