Businesses in the North West are among the most confident in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Despite reporting lower confidence in their business prospects at 35 per cent, and slightly lower economic optimism at 34 per cent, overall confidence remains at 35 per cent, six points above the national average.
Companies’ hiring intentions show that a net balance of 32 per cent of businesses in the region expect to hire more staff during the next year, down two points on last month.
Nationally, overall confidence fell six points to 29 per cent, as firms’ optimism about the economy fell, weighing down their confidence in their own business prospects.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “It’s great to see that North West businesses are among some of the most confident in the UK, with hiring intentions also remaining relatively robust.
“It is also heartening to see that optimism in the economy overall remains resilient in the region, despite falling seven points across the UK as a whole.
“Firms are currently facing uncertainty on everything from the UK’s future trading relationships to the prospect of interest rate rises. In situations like this, regularly revisiting business plans is key, and will ensure that firms are ready to respond to any potential challenges that may lie ahead.”
Across the region, a net balance of six per cent of businesses said they feel that the UK’s exit from the European Union is having a positive impact on their expectations for business activity, down four points on a month ago.
Meanwhile, a net balance of 53 per cent of companies in the region expect the Bank of England to increase interest rates this year, with the average* firm indicating that raising rates to 1.5per cent would have a significant negative impact on their business.
Outside London, which is the most confident region at 40 per cent, confidence is highest across the North of England, with the North East and Yorkshire also registering a confidence level of 35 per cent.
Businesses in the South East are least confident, with an overall confidence of 15 per cent, 14 points below the national average.
Confidence is strongest among transport and communications services businesses, at 50 per cent and 48 per cent respectively, while construction rose five points to 45 per cent.
Elsewhere, manufacturing firms report increased confidence at 35 per cent, compared with 31 per cent last month, but confidence among consumer firms fell 11 points to 29 per cent. Confidence in business and finance stands at 25 per cent, and at 22 per cent in retail.
Commenting on the drop in confidence levels across the UK, Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Increased global trade tensions and Brexit uncertainties are likely to have weighed on confidence, but it’s still near the long-term average and so there’s no need to hit the panic buttons.”