North West business confidence rises as economic optimism increases

Business confidence in the North West rose by seven points in October to 56%, according to the latest Business Barometer from Lloyds.

North West firms’ confidence in their own trading outlook remained unchanged month-on-month at 57%.

When taken alongside their optimism in the economy, up 13 points to 54%, this gives a headline confidence reading of 56% (vs. 49% in September 2026).

Their optimism in the economy was driven by stronger customer or market demand (43%), better economic data or news (40%) and industry-specific improvements (41%).

A net balance of 50% of businesses in the region expect to increase staff levels over the next year, up 18 points on last month.

Business confidence in the North West now sits above the 12-month average of 50%, with its highest figure this year of 59% in August.

Looking ahead to the next six months, North West businesses identified their top target areas for growth as investing in sustainability (48%), investing in their team, for example through training (45%) and entering new markets (44%).

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.

Jenny France, area director for the North West at Lloyds, said: “It’s encouraging to see that confidence levels in the North West have increased again this month.

“Confident firms create exciting new opportunities across the region, for example with more businesses now expecting to increase their staffing levels.”

She added: “Confidence sitting above the 12-month average is a positive sign as we start to approach the end of the year.

“And with businesses signalling clear priorities on how to drive growth, we’ll continue to support them to bring these plans to life.”

Overall, UK business confidence rose six points to 47% in October, sitting above the long term average of 30%.

The rise follows September’s reading of 41%. October has also seen an improvement in firms’ own trading outlook and economic optimism, despite continued uncertainty from the Middle East conflict.

Optimism in the wider economy rose nine points to 40%, compared with a 12-month average of 37%.

The drivers that led to the increase included stronger customer demand, better economic news, and improving financial conditions.

Businesses’ own trading outlook increased five points to 55%, compared with a 12-month average of 56%.

Nearly two thirds of firms (63%, up six points from September) expect an increase in activity over the year ahead, while those expecting a decrease in activity rose by one point to eight per cent.

Among firms expecting stronger activity, the main drivers were stronger customer demand, increased investment in technology and improved supply chain conditions.

Fiamma Morton, SME Banking at Lloyds managing director, said: “I hear from business owners every day about their determination to keep moving forward.

“There are still challenges, but increasingly the conversation is about what comes next: where new customers will come from, how technology can make the business better, and where investing today might create an opportunity tomorrow?

“There are careful choices to make. Cost pressures haven’t gone away, so investment needs to work hard.

“But the ambition is absolutely there. Businesses are continuing to find ways to grow, adapt and make their next move.”