North East Firms Reveal Boost in Confidence
Business confidence across the North East saw a notable bounce in the first half of July, outstripping a national rise.
Firms reported higher confidence in their own business prospects month on month, up 15 points at 52%, and general optimism about the economy was up six points to 62%. The sentiments were reported via the Business Barometer from Lloyds Bank Commercial Banking between July 1 and 15 – the period including the UK General Election which ushered in a new Government.
North East Boost in Confidence
Business Live is reporting that the region’s headline confidence reading rose 10 points to 57%, outpacing an overall national rise of nine points to 50%. This was the same as in May, which was highlighted as an eight year high. Wales and the East Midlands were identified as the most confident regions, each with a reading of 62%.
For the six months ahead, North East business leaders identified focusses on training (53%), breaking into new markets (42%) and “evolving their offering” (35%), for example by introducing new products or services, as their priorities. A net balance of 59% also expect to boost headcount over the next 12 months – a proportion up 28 points on June’s reading.
Researchers found confidence on the rise across all sectors with retail topping the table at a 25 point rise to 60% – its highest reading post-pandemic. Manufacturers produced a nine point rise to give a two year high and the service sector rose 10 points to 56%. Construction saw a small increase of two points to 44%.
Martyn Kendrick, regional director for the North East at Lloyds Bank Commercial Banking, said: “Our region’s confidence is now the strongest it’s been for six months. It’s particularly good to see investment in teams, including skills, top businesses’ growth agendas. This can have long-term benefits for the regional economy that extend far beyond individual companies, and mirrors mooted plans for an automotive skills development initiative as part of the North East’s £160m Investment Zone.
“As companies look ahead to their next phase of growth, we’ll be by their side with our funding and support to help ensure they have the backing they need to translate ambition and confidence into action.”
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “This month shows that businesses are feeling more confident, buoyed by their positive trading prospects and economic outlook. Retail-focused businesses were the main driving force behind the positive rise in trading prospects and these results tally with the improvement we have seen in consumer confidence.
“With the data suggesting that businesses may have taken a more cautious approach in June, next month will be one to watch to see if the renewed sense of optimism continues.”
The survey comes a week after the North East Chamber of Commerce’s released its latest Quarterly Economic Survey, suggesting that the pressures that have dogged regional businesses over the past few years are showing signs of easing, with confidence building.
The research covering Q2 showed companies are having fewer concerns about materials, labour and finance costs as well as more confidence in their staffing levels and profitability outlook.
Similarly, the ICAEW’s Business Confidence Monitor pointed to sales growth across the region’s firms – one of the strongest rates in the UK – as well as the highest level of business confidence in the North East in two years at 17.8 for Q2, up from 13.4 in the previous quarter.