Regional Business Confidence Declines, Still Higher Than UK National Average

28 Jun, 2024

Regional Business Confidence Declines, Still Higher Than UK National Average

The region witnessed a decline in business confidence during June, as reported by the latest Business Barometer from Lloyds Bank Commercial Banking. In May, business confidence in the North West increased by 12 points to 48%. However, June saw a five-point drop, bringing it down to 43%.North West companies reported lower confidence in their business prospects, with a seven-point decrease to 49%. When combined with their economic optimism, which fell by four points to 36%, the overall confidence reading reached 43% (compared to 48% in May). For the next six months, businesses in the North West highlighted their top growth targets as investing in their teams through training (41%), evolving their offerings with new products or services (41%), and introducing new technology (36%).The Business Barometer, surveying 1,200 businesses monthly, offers early signals about UK economic trends both regionally and nationwide. Overall UK business confidence dropped nine points in June to a net balance of 41%, down from an eight-point increase to 50% in May, its highest level since 2015. Despite the decline, confidence levels remained above the long-term average of 28%.

Although businesses showed lower confidence in their trading prospects, down 10 points to 44%, and in the economy, down seven points to 39%, both figures remained relatively strong. Yorkshire and the Humber (48%) was the most confident UK region in June, followed by the North East of England (47%) and the East Midlands (46%).Sector results were mixed in June. Three out of four sectors experienced a decline in trading prospects: construction fell by 16 points to 42%, retail dropped by 14 points to 35%, and services decreased by 11 points to 46%. Manufacturing, however, increased by two points to 51%.

Jenny France, area director in the North West at Lloyds Bank Commercial Banking, stated, “Despite a dip in confidence, North West businesses remain resilient. It’s particularly encouraging to see this in firms’ outlook over their own trading prospects, which were the second strongest in the country after London.”