North West confidence remains robust as UK average falls

Business confidence in the North West bucked the UK trend, holding steady during December.

The latest Business Barometer from Lloyds Bank Commercial Banking found that, while overall confidence across the country fell seven points during December, the North West’s figures remained robust.

Companies in the region report steady confidence in their business prospects at 27 per cent and economic optimism at 12 per cent, giving an overall confidence figure of 19 per cent – equal to that of November 2018.

However, North West firms’ resilience in December came on the back of confidence falling sharply to its lowest level all year during November.

Companies’ hiring intentions also fell by four points this month, leaving a net balance of 13 per cent of businesses in the region now expecting to hire more staff during the next year.

A net balance of eight per cent of North West firms said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, unchanged from a month ago.

Across the country, overall confidence fell seven points to 17 per cent as firms’ optimism about the economy dropped 10 points to seven per cent. Companies’ confidence in their own business prospects slipped five points to 26 per cent.

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “While it’s disappointing not to see figures bounce back from last month’s drop, the broader picture shows the North West remains one of the strongest economic regions in the UK, bucking the national trend by holding steady during December.

“As business leaders look to 2019 and hope for greater clarity in the months ahead, we expect to see confidence returning to higher levels.”

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Overall business confidence fell across all industry sectors. Businesses in the manufacturing and construction sectors were most confident in their prospects at net 23 per cent (down nine points) and 22 per cent (down seven points), respectively.

Confidence of retail businesses was nine points lower at net 21 per cent, while confidence was lowest in the services sector at 13 per cent (down seven points).

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Tentative signs of a recovery in business confidence last month proved to be short-lived, as businesses end the year more concerned about their trading prospects and the wider economy.

“The expected slowdown in economic growth in Q4 could well be extended into early 2019, but there is potential for a rebound in sentiment should there be some respite in uncertainties that firms currently face.”