March sees sharp fall in North West business confidence

Business confidence in the North West fell 13 points during March to five per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

The research, taken between the second and 16th March, showed that companies in the region had lower confidence in their own business prospects at 11% and lower economic optimism at five per cent. Together, this gives an overall confidence of nine per cent.

Across the UK, overall business confidence fell by 17 percentage points to six per cent in March, the lowest level since October 2019.

However, the report showed that nationally, for the second week of the survey, a much sharper fall in overall confidence was recorded at minus three per cent. It matches the lowest dip seen by the barometer since December 2011 and is otherwise the lowest dip since March 2009 during the global financial crisis.

Responding specifically to the impact of the coronavirus, 52% of North West businesses stated that they had already been affected or expected to be impacted, ahead of Boris Johnson’s initial call for the public to stay at home on March 16th.

This decline illustrates the impact the outbreak was having on business confidence before many initiatives launched by the Government to help combat the virus were announced.

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

Businesses in the North East had the highest confidence at 23%, ahead of the South West at 16%, and London at 12%.

Those in the South East were the least confident, with an overall confidence of -10%, 16 points below the national average

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “Following a period of improved confidence at the start of the year, the impact of the virus was clearly beginning to affect North West businesses even before the introduction of social distancing measures.

“As businesses continue to face significant challenges, we are here to help our customers through any interruptions they may face. We’ve set aside £2bn of arrangement fee-free finance to help small firms affected by COVID-19.

“This funding is designed to help businesses manage their cashflow, which might have been affected by supply chain interruptions or employee absences.

“We’re also advising firms on how they can access the Coronavirus Business Interruption Loan Scheme (CBILS), We remain committed to supporting our customers in the weeks and months ahead in any way we can.”

One business benefiting from that support is family-run hotelier Walker & Williams.

The business, which owns boutique 5-star aparthotels across the North West, secured the jobs of all 50 if its team thanks to a five-figure funding package from Lloyds Bank.

Walker & Williams has remained opened to cater to a small number of guests including service personnel, visiting Ministry of Defence staff and a family that recently lost its home to fire.

Max Walker-Williams, the hotelier’s founder, said: “Walker & Williams is a family which means that, no matter how long this goes on for, we are not willing to let a single member of our team go.

“While the hotels are quiet, we’ve been able to shift our focus and help support our local community.

“Lloyds Bank has been instrumental in this, by providing us with the additional cashflow we needed to secure jobs. This has given our staff peace of mind so they can meet their commitments and look after their families.”

In March, overall business confidence fell across all four sectors surveyed.

Confidence in the retail sector saw the sharpest decline, falling 21 percentage points to nine per cent. The manufacturing sector also saw a big decline from 31% to 11%, services was down 18 points to one per cent, while the construction sector fell by 15 points to 14%.

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “The results in March demonstrate the impact of the shutdown of large swathes of the economy to combat the pandemic even in advance of the Government’s stringent measures announced in recent days.

“Sentiment has returned to historic low levels after improving in recent months.

“We will continue to monitor what businesses are telling us and hope that they can take steps to minimise the impact of current economic downturn.”