The risks shaping North-East businesses today
ADVICE
Lee Elgie – Gallagher Stockton’ s managing director.
UNDER PRESSURE
The risks shaping North-East businesses today
Businesses across the North-East are no strangers to resilience. But, according to Lee Elgie, managing director of insurance broker Gallagher’ s Stockton branch, the range and intensity of pressures facing organisations today is creating a more complex risk environment than many have experienced in recent years.
The Gallagher 2026 Business Risk Index report, based on insights from 1,000 UK business leaders, explores the risks organisations are currently facing.
While national trends provide a useful benchmark, the findings from the North- East offer a revealing snapshot of the pressures closer to home.
At the top of the list is the impact of the cost-of-living crisis on customer spending, cited by 72 % of North-East respondents.
For many businesses, this translates directly into reduced demand, tighter margins and more cautious forecasting. Whether in retail, hospitality or manufacturing, the ripple effect of constrained consumer confidence is being widely felt.
“ What we’ re seeing isn’ t just one or two standout challenges- it’ s multiple pressures hitting businesses at the same time. That makes it harder to plan, invest and grow with confidence,” Lee said.
Closely following this are rising costs across the board.
More than six in 10 businesses highlighted the high cost of materials( 61 %) and operational expenses( 61 %) as key concerns.
From raw materials and components to energy, rent and logistics, the cumulative impact is placing sustained pressure on profitability. For sectors with already tight margins, these increases can be particularly difficult to absorb.
Overlaying this is the growing burden of imposed costs, including changes such as National Insurance increases( 58 %).
While often outside of a business’ s control, these additional financial commitments can influence hiring decisions, investment plans and overall growth ambitions.
Beyond cost pressures, the research also points to a layer of structural and strategic challenges.
Regulatory change( 56 %) continues to be a concern, particularly for businesses operating in heavily governed sectors. At the same time, low cash flow( 53 %) remains a persistent issue- often exacerbated by the very cost pressures businesses are trying to manage.
Interestingly, the findings also highlight a degree of forward-looking uncertainty. Half of respondents( 50 %) identified both the cost of salaries and the challenge of adopting AI as current risks.
While the former reflects ongoing labour market pressures, the latter speaks to a broader question many organisations are grappling with: how to embrace new technologies in a way that is both effective and commercially viable.
Rounding out the top concerns are supply chain disruptions( 47 %) and competition within the sector( 47 %).
Supply chain challenges continue to present ongoing pressures for many businesses, particularly those reliant on global networks, timely delivery and consistent access to materials.
Meanwhile, competitive pressures- whether from new entrants or shifting demand- are prompting organisations to continually reassess their positioning.
Taken together, these findings paint a picture of a region balancing immediate financial pressures with longer-term strategic decisions.
For many businesses, the challenge is not just identifying these risks, but understanding how they interact- and what steps can be taken to manage them effectively.
As Lee explains, taking a more structured approach to risk is becoming increasingly important.
“ It’ s not just about protecting against what might go wrong,” he said.“ It’ s about giving businesses the confidence to move forward, even in uncertain conditions.”
This is where working with an experienced insurance broker can make a tangible difference.
By helping organisations assess their risk landscape more holistically- from operational exposures and supply chain vulnerabilities through to emerging risks such as cyber and technology adoption- brokers can support more informed decision-making.
At a time when pressures are coming from multiple directions, having that broader perspective can help businesses not only respond to today’ s challenges, but prepare more confidently for what lies ahead.
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