- Business confidence in rose 19 points to 73% – the second-highest of any UK nation or region in July
- While firms’ confidence in their own trading prospects fell two points to 77%, their optimism in the economy climbed 41 points to 69%.
- A net balance of 81% of businesses in the region also expect to increase staff levels over the next year, up 27 points on last month.
- Overall UK business confidence increased one point in July to 52% – its highest level since 2015
Business confidence in the North East rose 19 points during July to 73%, according to the latest Business Barometer from Lloyds.
While companies in the North East reported lower confidence in their own business prospects month-on-month, down two points at 77%, their optimism in the economy rose 41 points to 69%. Taken together, this gives a headline confidence reading of 73% (vs. 54% in June) – the second-highest of any UK region or nation in July, after Wales (76%).
A net balance of 81% of businesses in the region also expect to increase staff levels over the next year, up 27 points on last month.
Looking ahead to the next six months, North East businesses identified their top target areas for growth as investing in their team, for example through training, (57%), entering new markets (52%) and introducing new technology, such as AI or automation (42%).
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.
National picture
Overall, UK business confidence increased one point in July to 52% – its highest level since 2015 and the third consecutive monthly increase.
Firms’ optimism in their own trading prospects rose one point to 58%, while their confidence in the wider economy increased two points to 47%
Sector Insights
July saw the service sector’s confidence increase by 11 points to 61%, one of the main drivers behind this month’s overall increase in business confidence, indicating strong momentum in the sector. This gain was partially offset by declines in other areas, with retail firms down eight points, manufacturers down four points and the construction sector down six points.
Martyn Kendrick, regional director for the North East at Lloyds, said: “This is now the fourth month in a row where North East confidence has been ahead of the national average.
“Local firms are firmly focused on making the most of new opportunities, and it’s incredibly encouraging that so many have hiring as part of those plans – something that won’t just benefit their businesses but their local communities too. As they press ahead with their ambitions, we’ll continue to ready to support their next steps.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “This continued upward trend reflects a growing sense of cautious optimism across the UK economy, underpinned by both improved trading prospects and broader economic sentiment. Despite ongoing cost pressures, firms are positioning for growth, particularly in services where hiring and investment plans are accelerating.
“Overall business confidence remains buoyant, with firms well placed to take advantage of opportunities such as new markets, adopting new technology and workforce expansion amid evolving market conditions.”