Business confidence in the North West increased by nine points during January to 48%, according to the latest Business Barometer from Lloyds, taking confidence levels back above the UK average.

Companies in the North West reported higher confidence in their own business prospects month-on-month, up 19 points at 70%. When taken alongside their optimism in the economy, down one point at 26%, this gives a headline confidence reading of 48% (vs. 39% in December 2025).

A net balance of 45% of businesses in the region also expect to increase staff levels over the next year, up five points on last month.

Looking ahead to the next six months, North West businesses identified their top target areas for growth as evolving their offer, for example, introducing new products or services (54%), introducing new technology like AI (38%) and entering new markets (35%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall, UK business confidence fell three points in January to 44%.

While firms’ confidence in their own trading prospects rose seven points to 59%, their optimism in the wider economy fell 14 points to 28%.

London was the most confident UK nation or region in January (68%), followed by Northern Ireland (66%) and the West Midlands (65%).

Sector Insights

Retail sentiment increased marginally in January, up two points to 49%, while confidence in the service sector rose slightly, up one point to 42%, the first increase since the summer. Confidence fell in the construction sector following a particularly strong increase in December.

Jenny France, area director in the North West at Lloyds, said:
“It’s great to see North West businesses starting the year with real optimism and feeling positive about their own trading prospects in the coming months.

“This month's data shows that firms have ambitious plans for 2026, whether that’s developing new services or investing in technology, and we’ll be there to support them as they pursue their growth ambitions.”


Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said:
“Firms are reporting confidence in their trading prospects at the start of the year, despite a slight softening of wider economic optimism. This points to businesses’ ability to manage external risks and a focus on growth opportunities.

“The first rise in confidence in the services sector in seven months is encouraging given the sector’s central role in supporting UK economic activity.”