Confidence among North East business leaders has tumbled as their sentiment towards the wider economy has also faltered.
A key survey of the region's firms showed confidence fell 26 points to 43% in March, as many companies reported lower confidence in their own business prospects month-on-month, which was down 36 points to 37%. Optimism in the economy as a whole fell 17 points to 49% - with responses collected before last week's Spring Statement.
The latest Business Barometer from Lloyds revealed North East companies' top target areas for growth are investing in their workforces (54%); introducing new technology, such as AI or automation (41%) and entering new markets (39%).
Across the country, business confidence remained flat at 49% as firms' optimism in their own trading prospects remained at 57% but confidence in the wider economy dropped one point to 40%. Of all the º£½ÇÊÓƵ nations and regions, the West Midlands and London topped the confidence tables at 62%, followed by the North West at 59%.
Researchers founder sentiment in the retail sector grew to a post-pandemic peak, with a seven point rise to 58%. But manufacturers saw the largest fall in confidence, down 12 points to 39% on the back of supply chain disruption worries. Construction firms also reported declining confidence at 48% and service sector operators also saw downward movement to 47%.
Martyn Kendrick, regional director for the North East at Lloyds said: "Even though confidence has softened, it's encouraging to see the North East’s businesses remaining focused on their growth plans. Whether it’s by helping them make investments in their team, technology or expanding into new markets, we’ll continue to support the region’s businesses in turning their ambitions into success."
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: "Business confidence remained steady this month, suggesting that º£½ÇÊÓƵ companies may have been waiting to see the impact of government decisions at home and globally. Despite this, today's data continues to reflect a positive growth trend in the º£½ÇÊÓƵ economy. With confidence maintaining last month’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities."
Readings from the Lloyds Business Barometer follow separate research from insolvency body R3, which shows a steep rise in the number of companies that went into liquidation between December and February. It identified a 42% rise over the three-month period, compared to the same period last year.
