North East firms lead UK in business confidence
Business confidence in the North East was the highest of any UK nation or region in September, according to the latest Business Barometer from Lloyds.
Companies in the region reported higher confidence in their own business prospects month-on-month, up two points at 70%. When taken alongside their optimism in the economy, up 24 points to 67%, this gives a headline confidence reading of 68% (vs. 55% in August).
A net balance of 54% of businesses in the region also expect to increase staff levels over the next year, up five points on last month.
Looking ahead to the next six months, North East businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (48%), entering new markets (36%) and investing in their team, for example through training (34%).
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 fell 12 points in September to 42%.
Firms’ confidence in their own trading prospects fell 12 points to 51%, and their optimism in the wider economy fell 11 points to 33%.
London was the second-most confident UK nation or region in September (57%), after the North East.
Sector Insights
Firms across manufacturing, construction, retail and services all saw confidence fall this month. The biggest change was in manufacturing with a decline of 31 points to 31%, a two-year low. Retail sentiment fell 17 points to 40%, its lowest level in four months. Similarly, confidence in the service sector fell six points to 47%, the lowest reading since April. Construction continued to decline for the fourth consecutive month, dropping 5 points to 35%.
Martyn Kendrick, regional director for the North East at Lloyds, said: “The North East is once again leading the country in business confidence.
“Local firms continue to show their characteristic ambition, resilience and adaptability – seeking out new opportunities and identifying new ways to drive their growth strategies. We’ll keep providing our support as they take their next steps.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “While increased market volatility earlier in the month may have impacted confidence, levels of trading prospects and economic optimism remain above their long-term averages. Businesses may find reassurance that the Bank of England is expected to reduce interest rates further in the next six months, while long-term global bond yields have calmed which, if sustained, may have a positive impact on businesses as we move into the last few months of the year.”