Region’s business confidence rises to highest levels in the UK

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Business confidence in the North West rose to the highest level of any UK region.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, confidence in the region rose 26 points during August to 64%.

Companies in the North West reported higher confidence in their own business prospects month-on-month, up 23 points at 62%. When taken alongside their optimism in the economy, up 29 points to 66%, this gives a headline confidence reading of 64%.

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

A net balance of 39% of businesses in the region expect to increase staff levels over the next year, up 16 points on last month.

Overall UK business confidence rose six points in August, reaching 36%, the highest level recorded since May 2018.

When asked about their overall trading prospects businesses reported a six-point increase on July’s reading at 34% and firms’ confidence in the economy also increased six points to 39%.

All UK nations and regions had a positive confidence reading in August.

The most confident regions were the North West (64%), North East (46%) and London (41%).

All bar three areas reported a growth in confidence in August, with the East Midlands (down 10 points to 28%), West Midlands (down three points to 27%) and Yorkshire and Humber (down two points to 26%) reporting marginal falls.

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “After 18 months of uncertainty, it’s fantastic to see such an uptick in confidence in the North West. It’s clear that the region has a huge role to play in spearheading the UK’s recovery from the impact of Covid-19 and could lead the way when it comes to growth, investment and innovation.

“We’ll be by the side of businesses across the region as they continue their recovery journey and look to capitalise on future growth opportunities.”

In sector terms, there was notable strength in sectors benefiting from the further easing of Covid restrictions.

Services confidence saw the greatest month-on-month increase, rising by 8 points to 36%, the highest level since January 2018.

Confidence in both manufacturing and construction also picked up (both up 7 points to 40%), led by rises in trading prospects for the year ahead.

The increase in manufacturing confidence came despite ongoing supply disruptions, although the level remains below the high in May. Retail confidence posted a smaller 2-point rise to 34%, remaining below the recent peak in May.