Business confidence on the up, says survey

BUSINESS confidence is rising in the North West as profit expectations increase and concerns over uncertainty in Europe subside, a report claims.

The Lloyds TSB Commercial Business in Britain survey, however, found that there were were only moderate increases in employment and investment plans for the next six months in the region.

The twice yearly report, now in its 21st year, canvassed the views of 1,800 UK businesses, including 110 firms in the North West, and shows that optimism is at its strongest level since the economy came out of the initial recession in 2009, driven in particular by stronger profit expectations but also by a better outlook for sales and orders.

The survey’s key Business Confidence Index tracks businesses’ views of likely sales, orders and profits for the coming six months and presents the overall ‘balance’ of opinion weighing up the percentage of firms that are positive in outlook against those that are negative.

The index has increased to 16 in the North West, from a balance of 0 in July 2012, due largely to a rise in expected sales and orders over the next six months. However, while confidence continues to rise, employment and investment intentions for the next six months have only moderately increased, suggesting that companies remain cautious about future hiring prospects and capital projects.

Leigh Taylor, regional director for Lloyds TSB Commercial in the North and Midlands said: “It is good to see that businesses in the North West have managed to work through the tough economic headwinds of the last couple of years and have a rather more positive outlook for 2013.

More than a third of firms in the North West (42%) said that they expect orders to increase during the first half of the year, compared to 13%  that think orders will fall.
 
Almost half (44%) stated that they think sales will increase in the next six months, 16% expect a  decline, leading to a 28% overall net balance expecting sales to increase, up from 4% on the previous survey in July 2012.

When asked what the greatest threat to their business would be over the next six months, the most common fear, cited by 41% of firms in the North West was weaker UK demand.