Business confidence falls in the North West but firms remain 'resilient', latest Lloyds Business Barometer shows

A branch of Lloyds Bank

Business confidence in the North West fell in June as firms were less confident about their own prospects and about the state of the economy as a whole.

The latest Business Barometer from Lloyds Bank Commercial Banking shows confidence in the region fell five points to 43%, though it remained above the UK average. UK national confidence fell nine points to 41%, though remained above the long-term average.

In the North West, firms polled reported lower confidence in their own prospects, down seven points on the previous month at 49%.Their optimism in the economy was down four points to 36%.

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Looking ahead to the next six months, North West companies said their top target areas for growth were investing in their team (41%), growing their offering with new products or services, (41%) and introducing new technology (36%).

Nationally, firms reported lower confidence in both their own trading prospects, down 10 points to 44%, and the economy, down seven points to 39%. The overall confidence level of 41% remains above the long-term series average of 28%.

The most confident part of the UK was Yorkshire and the Humber (48%), followed by the North East of England (47%) and the East Midlands (46%).

Three of the four sectors studied saw declines in trading prospects, with construction down 16 points to 42%, retail down 14 points to 35%, and services down 11 points to 46%. But there was positive news from the world of manufacturing, with confidence rising two points to 51%.

The Business Barometer surveys 1,200 businesses monthly to provide early signals about UK economic trends.

Jenny France, area director in the North West at Lloyds Bank Commercial Banking, said: “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."

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “These results suggest a slight drop in business confidence in June as firms’ trading outlook and economic optimism fell below levels seen in recent months. However, these results are still broadly in line with the positive readings we were seeing towards the start of the year.

“Fewer businesses indicated that their prices would increase in the next few months, which chimes with last week’s fall in inflation figures. Meanwhile, there was a mixed set of results seen across the sectors, but following last month’s increase, confidence fell in construction as well as retail and services”.

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