Optimism for trading prospects rises in line with infrastructure announcements
North West firms are increasingly confident in their own business prospects, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
The survey, which questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide, revealed 28% of North West businesses felt positive about their trading prospects, up seven points on last month.
When taken alongside their views of the economy, overall confidence dipped three points to 23% to be in line with UK as a whole, which stayed static for a second month.
Meanwhile, businesses’ hiring intentions in the region were unchanged, with 15% of firms in the North West expecting to hire more staff during the year, level with January’s figure.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “Recent weeks have boosted optimism for North West firms, with announcements of improvements to local infrastructure likely to be buoying confidence in the region.
“Major infrastructure pledges from rail operators, like Avanti and Arriva, shake-ups in rail franchises and clarity regarding HS2, will be welcomed by local businesses for the boost they can bring to the region’s prosperity.
“The announcements also come at a time when efforts to rebalance the economy and bring greater prosperity to the North are of national priority.”
Across the region, a net balance of nine per cent 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. This compares with a net balance of 12% of businesses who said it was having a negative impact on their business expectations in January.
Around the UK, businesses in London had the highest confidence at 29%, ahead of the West Midlands at 28%, and the East Midlands at 27%.
Those in Wales were the least confident, with an overall confidence of minus two per cent, 25 points below the national average.
In February, overall business confidence fell slightly in the services sector from 19% to 21%, but remained significantly above the four per cent level at the end of 2019.
Confidence in the manufacturing sector bounced back by 10 points to 31%, while the construction and retail sector increased by two and six points, 29% and 30%, respectively.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “The buoyed sustained results signal a return to economic growth for the first quarter of 2020 after a relatively flat final quarter end to 2019.
“The third consecutive rise in trading prospects and a swing to positive sentiment on the expected impact of leaving the EU are all tentative signs of improvement after the soft end to last year.”
