North West businesses signal drop in confidence for UK economy

Business confidence in the North West fell by seven points during April to 52%, according to the latest Business Barometer from Lloyds, but remained above the UK average for the ninth month in a row.

While businesses confidence in their own trading prospects held steady month-on-month at 64%, their optimism in the economy dropped 15 points to 39%.

Taken together, this gives a headline confidence reading of 52%, versus 59% in March.

A net balance of 43% of businesses in the North West expect to increase staff levels over the next year, up five points on last month.

Looking ahead to the next six months, North West businesses identified their top target areas for growth as investing in their team, for instance through training (51%), evolving their offering, for example by introducing new products or services (44%), and entering new markets (33%).

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.

 Nationally, UK business confidence fell ten points in April to 39%.

Firms’ optimism in their own trading prospects dropped seven points to 50%, while their confidence in the wider economy fell 13 points to 28%.

The North East was the most confident UK nation or region in April (59%), followed by the West Midlands (53%).

Confidence fell across the four broad sectors.

Manufacturing confidence remained broadly unchanged from last month, falling by one point to 38%, while the construction sector saw the largest decrease in business confidence this month, declining 22 points to 26%. Retail confidence also fell by 13 points down to 45% and the service industry fell seven points to 40%, both now at three-month lows.

Jenny France, area director in the North West at Lloyds, said: “Despite a slight dip this month, it’s encouraging that confidence in the North West has once again remained above the national average, and it’s great to see firms’ confidence in their own trading prospects unshaken.

“Businesses across the region are making new investments to capitalise on fresh opportunities. A good example is R Tindall Fabricators in Oldham, which we recently supported with new funding to expand its headquarters and acquire new machinery after it saw an increase in demand for its specialist services.”

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “With the announcement of global tariffs from the United States on 2nd April and the market volatility that followed, it is unsurprising that business confidence saw an impact this month.

“However, economic optimism remains higher than at the beginning of the year, showing businesses’ resilience in the face of recent challenges and overall confidence is still well above the long term average of 29%, an average taken from over 20 years of analysis.”