business

North West Businesses Most Confident In UK As Focus Remains On Growth

Business confidence in the North West fell two points to 42% in June, according to the latest Business Barometer from Lloyds Bank Commercial Banking. Despite the dip, businesses in the region reported the highest confidence levels in the UK.

Companies in the North West reported lower confidence in their own business prospects month-on-month, down 11 points to 49%. When taken alongside their optimism in the economy overall, up eight points to 35%, this gives a headline confidence reading of 42%.

But the resilience of firms across the North West is once again shining through.

North West businesses flagged a range of growth opportunities for the next six months, including diversifying into new markets (39%), investing in their team (37%) and evolving their offering (36%).

The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

A net balance of 43% of businesses in the region expect to increase staffing levels over the next year, down 15 points on last month.

Across the UK, business confidence fell 10 points during June to 28%. Firms’ optimism in the economy dropped 12 points to 21%, while their outlook on future trading prospects was down eight points, at 34%. The net balance of businesses planning to create new jobs also decreased, by nine points, to 28%.

Every UK region and nation reported positive confidence readings in June. However, all except the East of England (up 17 points to 31%) recorded a lower reading than last month. London (down 28 points to 35%), the West Midlands (down 23 points to 30%) and Scotland (down 15 points to 27%) reported the largest decreases month-on-month, with the North West (down two points to 42%) now the most optimistic region overall.

Martyn Kendrick

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “With inflation rising, supply chain challenges and labour shortages continuing to bite, businesses are facing into tough economic headwinds. But the resilience of firms across the North West is once again shining through.

“Businesses are clearly focused on growth. Hiring intentions remain strong and management teams are exploring opportunities to expand into new markets. Tools like asset and invoice financing can help firms manage cashflow and create working capital to invest in sustainable, long-term growth opportunities. We’re here to help the region’s businesses navigate this challenging economic period and build the foundation for growth in the months and years to come.”

Confidence among businesses in the manufacturing and construction sectors fell, bringing them close to the UK all-sector average, at 32% and 30% respectively, reflecting lower optimism in the economy. Service sector confidence declined to its lowest in a year, at 25%, showing weaknesses in hospitality, though offset by stronger confidence in business services. Confidence in retail businesses edged up this month four points from 27% to 31%.

Hann-Ju Ho

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “Business confidence declined this month, suggesting that the momentum for growth is moderating. Firms remain broadly positive but face several challenges ahead, including concerns around higher costs and slowing demand. If these trends continue, businesses may have less scope to pass on higher costs to support their margins.”