North West business confidence highest in the UK, latest barometer reading reveals

Economic confidence is on the up

Business confidence in the North West rose eight points during January to 48%, the highest in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the North West reported higher confidence in their own business prospects month-on-month, up two points at 52%.

When taken alongside their optimism in the economy, up 13 points to 42%, this gives a headline confidence reading of 48%.

North West businesses identified their top target areas for growth in the next six months as diversifying into adjacent markets (48%), investing in training and development (34%) and evolving their product and service offer (33%).

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

A net balance of 34% of businesses in the region expect to increase staff levels over the next year, up one point on last month.

Overall UK business confidence climbed in January, with firms reporting their highest confidence levels since July last year.

Business confidence increased by five points to 22% and the net balance of businesses feeling optimistic about the economy doubled on December’s reading to 16%.

Ahead of National Apprenticeship Week (February 6-12) 30% of businesses across the UK reported that they are looking at opportunities to grow by investing in staff development and training. A net balance of 17% of firms reported plans to create new jobs in the next 12 months.

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “It’s fantastic that businesses in the North West are continuing to grow in their overall confidence, and that so many are planning to invest in the year ahead.”

For the second month in a row, confidence in the manufacturing and service sectors increased, with manufacturing rising to 28% (up 15 points) and services up to 25% (up seven points).

Business confidence in construction was down two points to 27%, while retail confidence fell for the second month in a row to seven per cent (from 13%), the lowest level since February 2021.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence continues to improve following the December boost.

“Firms are clearly more optimistic about the wider economy and this is driving the increase, helped by precursory signs that wage and other cost pressures may be easing.

“It is still a tough environment for businesses, with high energy bills remaining a concern during the winter months, but there are grounds for optimism for 2023 if inflation starts to trend lower.”

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