New year bonus as NW business confidence rises
The North West has entered 2024 with an eight points increase in business confidence during January, to 40%.
According to the latest Business Barometer from Lloyds Bank Commercial Banking, North West companies reported higher confidence in their own business prospects month-on-month, up six points at 47%.
When taken alongside their optimism in the economy, up 10 points to 33%, this gives a headline confidence reading of 40% (versus 32% in December).
North West businesses identified their top target areas for growth in the next six months as investing in their team (42%), evolving products and services (35%) and entering new markets (29%).
A net balance of 36% of businesses in the North West also expect to increase staff levels over the next year, up 10 points on last month.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
Overall, UK business confidence rose nine points in January to 44% – its highest level since February 2022 and its strongest start to a year since 2016.
Firms’ outlook on the overall UK economy rose 10 points from 27% to 37%, while businesses’s optimism in their own trading prospects also climbed three points month-on-month to 51%.
Companies’ hiring intentions increased marginally, with 33% of firms intending to increase staff levels over the next 12 months, up four points on the month before.
London and the North East were the joint most confident parts of the UK in January – each posting a headline confidence of 62% – followed by the West Midlands (56%) and Yorkshire & the Humber (44%).
The East of England (38% in January vs 45% December) and Northern Ireland (29% vs 36%) were the only two regions to report declining levels of confidence. The majority of the data was collected before the December ONS inflation data was announced on January 17.
Three of the four sectors tracked in the Barometer reported rises in confidence. The most significant increase was in services which accelerated 15 points to 45%, up from December’s 16 point drop. Manufacturing confidence also increased to 49%, while construction rose eight points to a 10-month high of 45%.
There was a more mixed picture in retail, however, dipping three points to 41% with anecdotal evidence of weaker footfall and sales in December as shoppers hit the streets earlier than usual in November. Nevertheless, some companies still reported stronger sales over the festive period.
Chris Whittle, regional director for the North West at Lloyds Bank Commercial Banking, said: “It’s brilliant to see North West businesses hit the ground running this year, with a positive outlook for both their own prospects and the economy after a difficult 12 months.
“High inflation caused costs for the region’s manufacturers and technology businesses to rise, while consumer-facing sectors bore the brunt of weaker consumer demand. With many predicting conditions are set to improve, there should be more certainty for North West firms in the year ahead.”
