North West business confidence up despite political uncertainty

Business confidence rose in the North West during the last six months, new data shows.

According Lloyds Bank’s latest Business in Britain report, the region’s confidence index – an average of respondents’ expected sales, orders and profits for the next half year – rose to 26% after the recent snap election was called.

In January the score stood at 15%, up from 14% following the Brexit vote in last year’s EU referendum.

Now in its 25th year, the Business in Britain report collects the views of over 1,500 UK businesses, tracking the overall balance of opinion on a range of performance and confidence measures to weigh up the percentage of firms with a positive outlook compared to negative.

The North West was found to be less optimistic than Wales, but ahead of neighbouring regions Yorkshire and the East Midlands.

Lloyds Bank Commercial Banking regional director Martyn Kendrick said: “Confidence has risen significantly over the past 12 months, when it fell to just 14% following the EU referendum vote.

“The fact that this has happened despite the political uncertainty from a snap election is a positive sign for underlying confidence in the region.”

The share of North West companies naming political uncertainty and weaker UK demand as possible threats fell slightly, to 10% and 16% respectively.

The proportion of firms in the region that said they had experienced difficulty in recruiting skilled labour over the last six months increased to 50%, up from 30% in January. Similarly, 31% of firms reported challenges in recruiting unskilled labour, up from 8%.

Martyn continued: “Despite hurdles in recruiting both skilled and unskilled labour, North West businesses also anticipate sales, profits, and staffing levels to rise.

“The outlook for the external environment remains mixed, with details of Britain’s exit from the EU still to come but businesses have been working within those parameters for a while now. For the moment, North West businesses are taking this in their stride until there is a clearer sense of what it will mean for them in the short and medium term.”