Business confidence in the North West rose eight points during January to -5%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the North West reported higher confidence in their own business prospects month-on-month at -3%, up nine points on December. When taken alongside their views of the economy, up five points to -7%, this gives a headline confidence reading of -5%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Three fifths (60%) of firms said current Covid-19 restrictions had caused a fall in turnover but they expected the effects of the vaccine programme to boost trading prospects for 2021, with 60% saying the rollout had made them feel more confident about the year ahead. However, only 38% expect trading levels to return to pre-pandemic levels in the next twelve months.
When it comes to jobs, a net balance of 10% of businesses in the region expect to reduce staff levels over the next year, down five points on last month.
Nationally, overall business confidence dipped in January as the third lockdown came into force, falling by three points to -7%. Firms’ economic optimism dropped dramatically month-on-month, decreasing by 34 points to -10%.
Almost all UK nations and regions saw a month-on-month dip in confidence during January, with the biggest falls reported in Scotland (-32% vs -9% in December), Wales (-20% vs -1% in December) and the South West (-8% vs 5% in December). However, firms reported a month-on-month increase in confidence in London (up five percentage points to 3%) and the South East (up seven percentage points to -4%), as well as the North West (up eight points to -5%). Yorkshire business confidence remained steady month-on-month at -4%.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “The North West was one of only three regions to see confidence levels rise this month and the roll-out of vaccinations and continuation of mass testing initiatives – like the one seen in Liverpool – will be factors in driving this increase.
“However, overall confidence levels are still in negative territory and there remains a long road to recovery as firms continue to face challenges as a result of restrictions. No matter what the months ahead bring, we’ll continue to stand by the side of local firms, providing the tailored guidance and support they need.”
In the industry sectors confidence remained above pre-vaccine levels. While some sectors reported declines, manufacturing slipped by nine points to 9%, services fell by four points to -9% and retail by five points to 6%. Confidence levels in the construction sector improved for a second month, rising four points to -1%.
