Confidence among North East businesses has risen, driven by more positive views of the wider economy.
But the outlook on their own prospects fell in July, new research shows. Data in the latest Business Barometer from Lloyds shows overall North East business confidence rose 19 points to 73%, compared with 54% in June.
The reading is the second highest of any Ƶ region or nation in July, following only Wales at 76%. Sentiment in firms' own prospects was down two points, month-on-month, to 77%, while optimism in the wider economy grew 41 points to 69%.
The majority of firms surveyed (81%) in the region said they expect to increase staff levels in the next year – a 27-point improvement on June’s reading. And in the six months ahead, North East firms identified investment in their teams (57%), breaking into new markets (52%) and introducing new technology such as AI or automation (42%) as their key areas for growth.
Martyn Kendrick, regional director for the North East at Lloyds, said: “This is now the fourth month in a row where North East confidence has been ahead of the national average. Local firms are firmly focused on making the most of new opportunities, and it’s incredibly encouraging that so many have hiring as part of those plans – something that won’t just benefit their businesses but their local communities too.”
Nationally, business confidence was up one point to 52% in July – its highest level in a decade, and the third consecutive monthly increase. Optimism over the economy was up two points to 47% while sentiment towards their own trading prospects was up just one point to 58%.
Changing attitudes in the sector were one of the biggest drivers of boosted confidence in July. That was partially offset by falls in other areas with retailers’ confidence down eight points, manufacturers’ down four points and the construction sector down six points.
Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “This continued upward trend reflects a growing sense of cautious optimism across the Ƶ economy, underpinned by both improved trading prospects and broader economic sentiment.
“Despite ongoing cost pressures, firms are positioning for growth, particularly in services where hiring and investment plans are accelerating. Overall business confidence remains buoyant, with firms well placed to take advantage of opportunities such as new markets, adopting new technology and workforce expansion amid evolving market conditions.”
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about Ƶ economic trends both regionally and nationwide.
