NW business confidence dips in January, but remains above UK average

Business confidence in the North West fell by five points during January to 45%, but remained above the UK average, according to the latest Business Barometer from Lloyds.

Companies in the North West reported lower confidence in their own business prospects month-on-month, down two points at 51%.

When taken alongside their optimism in the economy, down seven points to 39%, this gives a headline confidence reading of 45%, versus 50% in December 2024.

Looking ahead to the next six months, North West businesses identified their top target areas for growth as entering new markets (43%), evolving their offering, for instance by introducing new products or services (38%) and investing in their team, for example through training (34%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Overall, UK business confidence fell two points in January to 37%.

While firms’ optimism in their own trading prospects strengthened four points to 51%, their confidence in the wider economy dropped seven points to 24%.

For the third month in a row, London was the most confident UK nation or region in January (55%), with the West Midlands following (51%).

There were similar falls in manufacturing, construction and retail this month, with a slight increase in services.

Confidence fell to 38% in manufacturing (down four points), 36% in construction (down five points), and 40% in retail (down three points).

However, confidence in services increased by three points to 38%.

These results come within a general trend of larger confidence declines in retail and services in recent months. Within the services sector, confidence has notably fallen in hospitality but has remained more stable in business services and health-related services.

Chris Whittle, area director in the North West at Lloyds, said: “Despite a dip in confidence this month, it’s encouraging to see that North West business confidence has remained higher than the national average.

“And with Andy Burnham unveiling six new economic development zones in Greater Manchester to unlock investment and job opportunities, it’s possible that this will provide a positive base for North West firms to build even more positive momentum.”