North West businesses are ‘most confident in the UK’

Business confidence in the North West rose 10 points during April to 49%, making the region’s businesses the most confident in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

While companies in the region reported lower confidence in their business prospects at 42%, economic optimism rose significantly to 55%.

Together, this gives an overall confidence of 49%, which is 10 points above last month’s figure of 39%.

Companies’ hiring intentions showed that a net balance of 44% of businesses in the region expect to hire more staff during the next year, up 14 points on last month.

Across the region, a net balance of 12% of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down five points on a month ago.

Nationally, overall confidence remained unchanged at 32%, although firms’ confidence in their own business outlook fell five points to 31%.

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

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “Although confidence in their own business prospects took a slight knock, perhaps linked to a decline in positive sentiment around the potential impact of leaving the EU, North West firms’ optimism about the wider economy grew significantly during April.

“This boost has prompted more businesses to plan to recruit more staff, which is particularly encouraging for the local economy.

“This positive sentiment all bodes well for the region’s prospects for the rest of the year, albeit firms are clearly realistic about the challenges that lie ahead.”

Outside the North West, overall confidence was highest in London (43%) and the North East, (34%).

Businesses in the South West were least confident, with an overall confidence of 20%, 12 points below the national average at 32%.

Among different sectors, transport shows the strongest overall confidence (at 56%), followed by communications (47%).

The third-strongest industry sector was manufacturing (40%), even though it fell by nine points.

The industry sectors with weakest overall confidence were retail, which fell 12 points to 15%, and health, education and public sectors (all at 20%).

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The fact that UK businesses’ economic optimism rose this month, against a backdrop of slightly eroding business prospects, is clearly good news.

“With more than half of firms nationwide more upbeat about the economy than they were at the start of the year, it will be interesting to see if that trend continues to grow as we approach the half way point in 2018.”