Business confidence continues to climb for North East firms, according to Lloyds Bank

According to the latest Business in Britain report from Lloyds Bank, business confidence in the North East continues to climb, reflecting rising expectations for orders, sales and profits in the next six months.

The twice yearly report canvasses the views of 1,500 UK businesses nationally and shows that the region’s firms are continuing to grow in confidence, driven by expectations of stronger profits, orders and sales over the next six months.

Since the last North East report in January 2014, the confidence index has increased by 17 points to 57 per cent. This was mainly driven by firms’ expectations of increasing profits – reflecting businesses’ renewed optimism for the UK economy.

Leigh Taylor, area director SME Banking in the North East, Lloyds Bank Commercial Banking said: “This represents a good upturn in confidence for the North East. We hope that it will lead to a further improvement in economic activity for the second half of 2014 to allow British businesses to grow and prosper.”

Prospects for firms across the region in the second half of 2014 look set to continue the sharp rebound in UK economic activity since early 2013 with almost two-thirds of the North East’s businesses (65 per cent) saying that they expect their orders to increase during the second half of the year; compared to fewer than one in ten (eight per cent) that anticipate a decline. The resulting 58 per cent overall net balance represents a seven point increase from January 2014.

Similarly, two-thirds of businesses (68 per cent) stated that they think their sales will increase in the next six months, while only five per cent expect a drop, leading to a 63 per cent overall balance. This is a 14 point increase from the beginning of the year.

Firms are also upbeat about recruitment prospects with almost a third of businesses (28 per cent) saying that they will increase staff numbers during the second half of the year.

Trevor Williams, chief economist, Lloyds Bank Commercial Banking, said: “Business sentiment is at historically record highs and hence there is a healthy appetite to invest as businesses are much more confident about their future trading prospects. These developments augur well for economic growth over the remainder of 2014.”