Member Article

North East business confidence remains steady despite delay to freedom day

Lloyds Bank’s Business Barometer for June 2021 shows:

• North East businesses confidence rises one point to 27%
• Number of firms planning to take on new staff over the next 12 months rises ten points to 22%
• UK business confidence remains steady at 33% with all regions and nations reporting a net positive reading for the third consecutive month

Business confidence in the North East nudged up by one point to 27% in June according to the latest Business Barometer from Lloyds Bank Commercial Banking. 

Companies in the North East reported lower confidence in their own business prospects month-on-month, down three points at 23%. When taken alongside their optimism in the economy, up six points to 32%, this gives a headline confidence reading of 27%.

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 22% of businesses in the region expect to increase staff levels over the next year, up ten points on last month.

Overall UK business confidence remained steady month-on-month at 33%. Firms reported a small increase in their business prospects, up two points to 30%, the highest reading since September 2020. Confidence in the economy dipped marginally by two points to 36%.

Across the UK all regions and nations reported positive confidence readings for the third consecutive month. Businesses in Scotland (up 27 points to 42%), London (up 17 points to 41%) and the East of England (up ten points to 36%) reported the highest increases in overall confidence.

While confidence remained positive, firms in eight regions reported a month-on-month drop. The biggest decreases were in Yorkshire and Humber (down 14 points to 30%), the West Midlands (down 12 points to 29%), the North West (down nine points to 29%) and East Midlands (down nine points to 31%).

Steve Harris, regional director for the North East at Lloyds Bank Commercial Banking, said: “The anticipated delay to the easing of lockdown restrictions this month was a big blow to the North East economy, especially tourism and hospitality sector businesses that were gearing up to finally resume normal trading after 15 months of disruption.

“In spite of this, North East businesses remain optimistic and it’s encouraging to see more of them now looking to take on new staff over the next 12 months.

“We’ll continue to remain by the side of North East businesses and help them continue this strong momentum over the months ahead.”

The majority of responses were given before the various UK governments formally announced the delay to the removal of all limits on social contact, which was originally expected to happen on 21st June in England and close to that date in other parts of the UK. However, it is likely that anticipation of the delay may have had a small negative impact in confidence particularly in the retail sector (down eight points to 36%) while manufacturing also fell (down 18 points to 35%). Despite this, confidence remains at historically high levels across the broad industry sectors – in part due to services increasing by five points (31%) to its highest level in more than three years and construction remaining steady at 35%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “A fifth consecutive monthly increase in trading prospects and employment expectations highlights the resilience of UK businesses as they continue to recover from the challenges presented by the pandemic. Although we must now wait slightly longer for the last remaining COVID-19 restrictions to ease, it’s an encouraging sign that firms continue to have strong overall confidence in the outlook for the UK economy, as well as their expectations for their own growth prospects.”

This was posted in Bdaily's Members' News section by George Hall .