Business confidence in the North West has fallen in the past six months as uncertainty surrounding Brexit and fears of weaker UK demand emerge as the biggest risks facing the region’s firms, according to the latest Business in Britain report from Lloyds Bank.

Confidence – calculated as an average of respondents’ expected sales, orders and profits over the next six months – fell 12 points to 19 per cent in the past six months, prompting firms to cut their investment and recruitment plans.

The net balance of businesses looking to grow investment in the next six months stands at six per cent, down 17 points compared with January, while the net balance of businesses looking to hire more staff fell 11 points to seven per cent.

The fall in firms expecting to hire more staff could be the result of increasing difficulties hiring skilled labour, with the number of businesses saying they had experienced difficulties recruiting the right talent rising six points to 52 per cent.

Despite these difficulties, the number of businesses expecting to increase pay fell by 10 points to 15 per cent.

The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

The North West was among the least confident regions in the UK, with only the East Midlands showing lower confidence at 14 per cent. In contrast, confidence was highest in London (31 per cent), followed by the South East (30 per cent).

Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “It’s concerning to see that North West businesses have gone from being among the most confident in the country to among the least in just six months.

“This is mainly due to concerns over weaker UK demand and an ongoing lack of clarity surrounding Britain’s exit from the EU.

“But at times of uncertainty, scaling back investment and recruitment plans rather than increasing them may not always be the best the option.

“Although it makes sense to retain a level of caution, halting plans completely may mean that firms miss out on chances to seize any new opportunities amid the current turbulence.”

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here