Business confidence in the North West fell 19 points during November to 9%, according to the latest Business Barometer from Lloyds Bank Commercial Banking – conducted between 1st-15th November, before the Chancellor’s Autumn Statement announcement on Thursday the 17th November.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 15 points at 18%. When taken alongside their optimism in the economy, down 24 points to 1%, this gives a headline confidence reading of 9%.
North West businesses identified their top target areas for growth in the next six months as evolving their offering (42%), investing in their teams (39%) and investing in sustainability (35%).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 17% of North West businesses expect to increase staff levels over the next year, down 29 points on last month.
Overall UK business confidence fell five points during November, but remained positive at 10%. Firms’ outlook on their future trading prospects was down two points to 25%, and their optimism in the wider economy dropped four points to -2%. Despite a seven-point dip, UK businesses remained positive about hiring intentions with 14% of firms aiming to create new jobs in the next 12 months.
All UK regions and nations, apart from the South East, reported a positive confidence reading in November, with seven recording a month-on-month increase in confidence. Of those recording an increase in confidence, Scotland (up 19 points to 24%), Wales (up 12 points to 17%) and the South West (up nine points to 5%) saw the largest monthly changes, with Scotland now the most optimistic overall.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “A dip in optimism amid reports of recession shouldn’t come as a surprise. But we can be encouraged by the fact that North West firms plans to invest in sustainable measures over the next six months and almost a fifth are still intending on creating new jobs.
“Businesses are under no illusions that realising their ambitions will require support, and we’re doing all we can to ensure that they have everything they need to meet their goals. For example, our Clean Growth Finance Initiative offers firms discounted lending on sustainable features – from solar panels to electric vehicle charging points.”
Business confidence in retail increased to 15% (up from 9%), perhaps reflecting a renewed confidence in trading prospects ahead of the festive season. However, business confidence in the manufacturing sector fell for the sixth month in a row, to 4%, down 9 points, the lowest confidence level since early 2021.
The construction sector held gains made in October, remaining unchanged at 20%, although this level still remains weaker than in the first half of the year.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Given the recent political and economic landscape, it comes as little surprise that economic optimism and business confidence have fallen this month. Pay growth expectations remain high by historical standards, which could signal ongoing difficulties ahead for businesses to fill vacancies. Looking ahead, it will be interesting to see if the clearer policy picture provided by the Autumn Statement will lead to business confidence moving in a more positive direction as we go into 2023.”
