North East firms Show Growing Economic Confidence

A survey of companies in the North East showed the region was demonstrating some economic confidence and resilience. Confidence is rising among North East companies, bucking a national trend of falling optimism over the state of the UK’s economy.

The Lloyds Bank Commercial Banking Business Barometer, which measures confidence among 1,200 companies, put regional confidence up four points to 31% as more firms signalled optimism about their own prospects and the economy more widely. Among the top focusses for North East respondents were investment in people at 48%, entering new markets at 35% and “evolving their offering” at 33%.

A net balance of 30% of businesses in the region expect to increase staff levels over the next year, up eight points on last month. Steve Harris, regional director for the North East at Lloyds Bank Commercial Banking, said: “North East businesses are battling a range of challenges, with rising costs continuing to affect key sectors in the region such as automotive, pharmaceuticals and manufacturing.

“However, the region’s firms are staying resilient and emerging markets such as those bred from the transition to green energy are injecting new life into the area. In the months ahead, effective supply chain management that incorporates simplified processes and cuts waste will be key to businesses effectively managing cashflow and putting themselves in the best position to prosper.”

Counter to the North East trend, overall UK business economic confidence fell three points during July to 25% – fuelled by misgivings about the economy rather than their own prospects, where the outlook was more positive. Lloyds said the net balance of businesses planning to create new jobs fell seven points to 21%.

Several other regions reported a positive confidence reading during the month, including the East of England, up 15 points to 46%; the West Midlands, up eight points to 38%; and Wales, up seven points to 30%. Analysis by sector showed confidence among manufacturers declined the most with businesses citing moderating trading prospects, a poorer economic outlook and issues with inflation and supply chains.

There were small falls in confidence for construction, at 28%; retail at 25%; and services at 24%.

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