North West business confidence takes a hit, but remains positive
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Business confidence in the North West fell 17 points during September, to 47%, but remains in line with the UK average of 46%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
North West firms reported lower confidence in their own business prospects month-on-month, down 12 points at 50%. When taken alongside their optimism in the economy, down 21 points to 45%, this gives a headline confidence reading of 47%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before fuel disruption and ongoing supply chain issues tightened their grip.
A net balance of 39% of businesses in the North West expect to increase staff levels over the next year, the same level reported in August.
Overall, UK business confidence rose 10 points in September to 46%, with all regions and nations reporting double digit confidence levels.
The number of businesses planning on hiring new staff more than doubled from 18% to 37% as firms plan to increase headcount over the next 12 months. Overall confidence in trading prospects rose by nine points to 43% and firms’ optimism in the economy increased by the same amount to 48%.
All bar three UK regions reported an increase in confidence, with Wales (up 27 points to 46%) and Yorkshire and Humber (up 22 points to 48%) reporting the biggest jumps. Alongside the North West, firms in the East of England (down nine points to 30%) reported a fall in confidence, and businesses in the South East reported no change month on month at 32%.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “The resilience we’ve seen from North West businesses over the past 18 months has been impressive and despite the fall in confidence this month, the region remains above the UK average both in terms of overall outlook and in its recruitment ambitions.
“However, despite the challenges firms are experiencing with the current fuel market and supply chain disruption, businesses will, hopefully, move into the final quarter of the year feeling ready to capitalise on opportunities that come their way.”
Nine out of the 12 UK regions and nations registered an increase in business confidence this month.
Wales (up 27 points to 46%), Yorkshire and the Humber (up 22 points to 48%) and London (up 21 points to 62%) all saw significant rises in confidence.
The North West remained one of the areas with the highest levels of business confidence at 47%, even after a significant fall of 17 points from a very robust August.
Hann-Ju Ho, senior economist Lloyds Bank Commercial Banking, said: “It remains encouraging to see a further improvement in business confidence reaching its highest level since April 2017.
“Employment expectations have risen significantly, with more than half of businesses expecting to recruit in the next 12 months.
“The hope is that the availability of labour will increase to alleviate current staff shortages for many firms, which will help to underpin UK economic growth over the medium term.”