North West Business Confidence Falls In March

Business confidence in the North West fell by six points during March to 43%, according to the latest Business

Barometer from Lloyds Bank Commercial Banking.
Companies in the North West reported higher confidence in their own business prospects month-on-month, up one point to 55%. However, their optimism.

Looking ahead to the next six months, North West businesses identified their top target areas for growth as entering new markets, for example by diversifying into adjacent markets or exporting to new ones (37%), evolving their offering, including by introducing new products or services (32%) and introducing new technology, such as automation or AI (32%).

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

Overall UK business confidence registered 42% in March, the same as in February, as firms’ confidence in their own trading prospects (49%) held steady, and confidence in the economy strengthened by one point (35%).

Yorkshire and the Humber was the most confident UK nation or region in March (60%), followed by the North East (56%) and London (52%).

Sector Insights

Services confidence fell 5 points to 40%, the first decline since December. That drop, however, was offset by rises in confidence in the manufacturing, retail and construction sectors.

The gains in manufacturing (up 1 point to 41%) and construction (up 2 points to 40%) were relatively modest and confidence remained below levels seen at the start of 2024. Firms in the retail sector reported improved confidence (up 5 points to 45%), which was the strongest result for over two years.

It’s hugely encouraging to see that even though businesses are less optimistic about the economy, their confidence in their own prospects has only strengthened. This reflects the hard work North West firms have put in to build resilience and successfully adapt to a fast-moving environment.

The North West is a region marked by its ambition. As firms target further growth, we’ll continue to by their side with our support – whether that’s helping carry out their plans to enter new markets, or to capitalise on the opportunity of new technologies.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said:

“With businesses reporting 42% confidence in March, this month’s figures maintain the recent improvement bringing a positive end to the first quarter of the year. Firms are showing increasing resilience which is reflected in their easing concern about supply chain disruption and energy prices.

“Businesses also continue to signal optimistic hiring intentions, although slightly down on previous months. It’s possible the impending minimum wage rises in April are beginning to come into sharper focus for businesses – especially smaller firms.

“Among the regions there was a mixed picture. Following unusually low confidence in February, London bounced back with a 14-point increase to bring the capital back in line with typical figures reported for the area, although the greatest confidence was shown by businesses in Yorkshire & the Humber who reported a 29-point rise, making it the most confident region overall. However, businesses in the Midlands saw a significant fall which seems to be an outlier compared to recent results.

“Overall, the Barometer across the quarter suggests that we could begin to see more optimistic economic growth in 2024 than seen in recent years, although medium-term challenges remain.”