NW business confidence plunges to lowest level this year

Business confidence in the North West fell sharply during November to hit its lowest level in 2018, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

The latest report found that overall optimism across the region fell to 19% this month, 17 points lower than October’s reading of 36%.

Companies became more pessimistic about both their own prospects and the wider economy, with firms’ reporting lower confidence in their business activity at 27%, down 12 points, and reduced economic optimism at 12%, down 20 points.

Despite this, the underlying picture – measured by the average over the past three months – shows an overall confidence figure of 31%, the third highest in the UK behind London and the West Midlands.

Nationally, overall confidence bounced back, climbing five points to 24% as firms’ optimism about the economy rose nine points to 17%.

Companies’ confidence in their own business prospects also rose two points to 31%.

While hiring intentions across the UK held firm at 21% during November, in the North West a net balance of just 17% of businesses say they expect to hire more staff during the next year, down 19 points on last month.

A net balance of eight per cent of businesses across the region also said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down seven points on a month ago.

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “The North West has consistently registered as one of the most confident regions in the UK throughout 2018, so it’s surprising to see it’s bucked the national trend this month, with optimism falling sharply.

“But the region has shown itself to be resilient in the past and, with the prospect of greater clarity to come in the months ahead, we expect that confidence to return.”

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

Looking at various sectors, nationally, firms in the manufacturing sector saw the largest increase overall, rising by 11 points to 32%, while construction also registered a significant improvement of seven points to 29%.

Retail confidence edged up by one point to 30%, while other services rose five points, but still continued to lag behind other sectors at 20%.

Concerns about the impact of leaving the EU were the highest in manufacturing and other services.