Growing confidence among firms in the North East is outstripping that of their regional peers, new research from Lloyds bank suggests.
Companies in the region reported higher confidence in their own business prospects in February, up five points month-on-month to 73% and greater confidence in the economy overall, up 44 points to 66%. Together the measures give a headline confidence reading of 69%, up from 45% in January and the highest of any º£½ÇÊÓƵ national or region last month.
The positive movements are leading more businesses to hire staff over the next year with a net balance of 76% suggesting they will increase headcount. Firms pointed to their target areas for growth as investment in teams (52%), entering new markets (45%) and introducing new technology (37%).
Nationally, the Business Barometer research showed business confidence increased 12 points to 49%. That was the highest level since August 2024 as firms' optimism towards their own trading was boosted six points to 57% and confidence on the wider economy was up 18 points to 42%.
The North East led the regions table followed by the North West and East of England in second place, with 61% confidence. Across sectors, manufacturing showed the largest sentiment improvement - up 13 points to 51% - and construction increased 14 points to 50%. Among retailers, confidence was up 11 points to 51% and services rose 10 points to 48% while there was upward movement in services and hospitality with confidence reaching its highest levels in several months.
Martyn Kendrick, regional director for the North East at Lloyds said: "North East firms’ outlook continues to brighten, buoyed by both greater optimism in the economy and their own prospects. We’ll continue to support the region’s businesses as they look to capitalise on this confidence – helping them take the steps they need to drive further growth, whether that’s by hiring, entering new markets or implementing new technologies."
Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: The rise in business confidence demonstrates the resilience of º£½ÇÊÓƵ businesses and their ability to navigate challenges, such as rising costs and uncertainty. Increased optimism, along with an expected uplift in trading prospects, is prompting businesses to invest in growing and upskilling their workforce, putting them in a prime position to capitalise on increased demand and drive future growth.
"This chimes with the expectations businesses set out at the beginning of the year, where they predicted a strong start to 2025, with the majority (70%) expecting to see their turnover increase in the year ahead. To sustain this positive momentum, it is important that businesses continue to innovate and adapt, ensuring they remain competitive and resilient to future challenges."
