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North West confidence falls in May - Lloyds Bank

Business confidence in the North West fell slightly during May to 16 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region report lower confidence in their own business prospects, down eight points to 19 per cent, while their optimism about the wider economy held steady at 13 per cent, 11 points above the national average. Together, this gives an overall confidence reading of 16 per cent, down four points on last month.

Firms’ recruitment plans also slowed slightly this month, as a net balance of 16 per cent of businesses said they expect to hire more staff during the next year, down three points from April’s reading.

Across the North West, a net balance of 18 per cent of businesses say they feel the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up four points on a month ago.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Martyn Kendrick, regional director for North West at Lloyds Bank Commercial Banking, said: “While it’s disappointing to see North West firms’ confidence dip over the last month, this is in line with the trend across the country.

“It’s important to remember the region continues to have one of the most resilient local economies in the country and business leaders will be revisiting their business plans and looking at the support on offer to help them weather any continued uncertainty in the coming months.

“Our commitment to lend £1.3 billion to North West firms this year is just one of the ways we’re helping businesses in the region prosper.”

Regional picture

Across the UK, overall confidence slipped four points to 10 per cent as firms’ confidence in their own prospects fell six points to 17 per cent, while their economic optimism dropped two points to two per cent.

Businesses in Yorkshire and the Humber show the most confidence, at 23 per cent, ahead of the West Midlands (21 per cent).

Those in the East of England are the least confident, with an overall confidence of minus six per cent, 16 points below the national average.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Overall business confidence continues to sit below the long-term average. A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU.

“It’s encouraging to note that while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.” Rise in manufacturing confidence

Confidence rose among manufacturing businesses for the second consecutive month, up 5 points to a four-month high of 21per cent. The sector was the most confident in both trading prospects and economic optimism.

The services sector continued to report the weakest overall confidence (down 5 points to 7 per cent), reflecting firms’ more negative economic optimism and the expected impact of the UK leaving the EU. Confidence also fell in construction (down 3 points to 12 per cent) and retail (down 5 points to 11 per cent).

This was posted in Bdaily's Members' News section by James Stewart .