Member Article

North East business confidence rises for third month in a row

Lloyds Bank’s Business Barometer for April 2021 shows: • Business confidence in the North East rose for a third month to 37% • Number of firms planning to make new hires in the next twelve months doubles month-on-month to 20% • Overall UK business confidence at highest level since September 2018 as lockdown restrictions lift and businesses reopen in England

Business confidence in the North East rose 11 points during April to 37%, according to the latest Business Barometer from Lloyds Bank Commercial Banking . This marks a third month of business confidence rising and is the highest level of business confidence recorded in the region since February 2018.

Companies in the North East reported higher confidence in their own business prospects month-on-month, up 10 points at 36%. When taken alongside their optimism in the economy, up 11 points to 38%, this gives a headline confidence reading of 37%.

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

When it comes to jobs, a net balance of 20% of businesses in the region expect to increase staff levels over the next year, up 10 points on last month.

Overall UK business confidence surged 14 points in April to 29%, the highest reading since September 2018. The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further restrictions easing in Wales and Scotland. Firms’ confidence in their own business prospects rose by 14 points to 26%, and their optimism in the economy increased by 15 points to 32%.

Most UK regions and nations reported a month-on-month increase in confidence during April, with firms in the South West (up 22 points to 30%), London (up 20 points to 32%), the East Midlands (up 20 points to 40%) and Yorkshire and the Humber (up 20 points to 32%) reporting the largest surges. No nation or region reported a fall in confidence, and nowhere had a net-negative confidence reading for the first time since July 2019.

Steve Harris, regional director for the North East at Lloyds Bank Commercial Banking, said: “Business confidence in the North East has surged again – a clear reflection of the positive impact the reopening of both hospitality and retail is having on businesses.

“It’s also encouraging to see that more firms are planning to increase staffing levels this year in another sign that we are on the road to recovery. We’ll continue to stand by businesses in the region over the coming weeks and months as they look to build back stronger.”

Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs. Manufacturing stood out as the most positive sector (40%), likely reflecting strong global demand and notwithstanding ongoing supply chain issues. Retail confidence jumped to 39%, while construction confidence also increased to 28%. Services confidence rose to 25%, which was also the highest it has been since 2018.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead. While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of COVID-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”

This was posted in Bdaily's Members' News section by Hamish Cruickshank .