North West business confidence recovers with August uplift

Business confidence in the North West rose 20 points during August to 53%, according to the latest Business Barometer from Lloyds Bank Commercial Banking, making a recovery from July when confidence levels dipped by 10 points.

During August, companies in the North West reported higher confidence in their own business prospects month-on-month, up 21 points at 60%. When taken alongside their optimism in the economy, up 20 points to 46%, this gives a headline confidence reading of 53% (vs. 33% in July).

Looking ahead to the next six months, North West businesses identified their top target areas for growth as investing in their team, for example through training (45%), introducing new technology (41%), and entering into new markets (38%).

A net balance of 45% of businesses in the region also expect to increase staff levels over the next year, up 25 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 in August remained unchanged from July at 50%.

Firms’ confidence in the overall economy increased two points to 47%, offsetting marginally weaker confidence in their own trading prospects, which fell two points month-on-month to 54% but remained above the long-term average.

The North East was the most confident UK nation or region in August (65%), followed closely by Scotland (64%).

Output expectations for the various sectors remained at, or near, their three-year highs. Construction had a steep increase to 58%, up by 14 points, whereas other sectors experienced slight declines. Trading prospects for manufacturing dropped by two points to 58%, at the same level as construction, while Retail and Services fell to 53% down seven and thre points, respectively.

Jenny France, area director in the North West at Lloyds Bank Commercial Banking, said: “It’s great to see North West confidence rising again, buoyed by both a more optimistic trading and economic outlook.”

Looking at the national picture, Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “As in July we’ve seen a particularly strong outcome for business confidence.

“It remains at an elevated level of 50%, which is well above the long term average of 29% – and it has been above the average for the past 15 months.

“Official GDP data for the first half of this year was encouraging and the survey results indicate that solid economic performance will likely continue as we move into the second half of the year.

“On a more cautious note, we have seen wage growth expectations pick up this month, although not enough to negate the downward trend so far in 2024.

“Overall, the economy looks to be stable and from the positive results recorded, businesses are echoing this sentiment.”