North West business confidence dips in June – but remains positive

Martyn Kendrick

Business confidence in the North West fell nine points during June, to 29%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the North West reported lower confidence in their own business prospects month-on-month, down six points to 25%.

When taken alongside their optimism in the economy, down 10 points to 34%, this gives a headline confidence reading of 29%.

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

When it comes to jobs, a net balance of 15% of businesses in the region expect to increase staff levels over the next year, up two points on last month.

Overall UK business confidence remained steady month-on-month at 33%. Firms reported a small increase in their business prospects up two points to 30%, the highest reading since September 2020. Confidence in the economy dipped marginally by two points to 36%.

Across the UK all regions and nations reported positive confidence readings for the third consecutive month. Businesses in Scotland (up 27 points to 42%), London (up 17 points to 41%) and the East of England (up 10 points to 36%) reported the highest increases in overall confidence.

While confidence remained positive, firms in eight regions reported a month-on-month drop.

Alongside the North West, the biggest decreases were seen in Yorkshire and Humber (down 14 points to 30%), the West Midlands (down 12 points to 29%), and East Midlands (down nine points to 31%).

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “With widespread concern over the rise of the Delta variant across areas like Greater Manchester, it’s unsurprising to see confidence dip this month.

“However, the North West has been one of the most resilient regions throughout this pandemic and it’s positive to see firms taking steps towards growth with plans to increase staffing levels over the next 12 months.”

He added: “As the vaccine roll-out continues at pace and with restrictions set to ease again next month, we hope to see confidence levels rise.”

The majority of responses were given before the various UK governments formally announced the delay to the removal of all limits on social contact, which was originally expected to happen on June 21, in England and close to that date in other parts of the UK.

However, it is likely that anticipation of the delay may have had a small negative impact in confidence, particularly in the retail sector (down eight points to 36%) while manufacturing also fell (down 18 points to 35%).

Despite this, confidence remains at historically high levels across the broad industry sectors – in part due to services increasing by five points (31%) to its highest level in more than three years and construction remaining steady at 35%.

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “A fifth consecutive monthly increase in trading prospects and employment expectations highlights the resilience of UK businesses as they continue to recover from the challenges presented by the pandemic.

“Although we must now wait slightly longer for the last remaining COVID-19 restrictions to ease, it’s an encouraging sign that firms continue to have strong overall confidence in the outlook for the UK economy, as well as their expectations for their own growth prospects.”

Click here to sign up to receive our new South West business news...
Close