North East businesses remain resilient amid economic challenges, says Lloyds

Business confidence in the North East remained steady at 31 per cent during August, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region reported lower confidence in their own business prospects month-on-month, down 41 points at 3 per cent.  When taken alongside their optimism in the economy, up three points to 22 per cent, this gives a headline confidence reading of 31 per cent.

Businesses in the North East identified their top target areas for growth in the next six months as investing in their teams (49 per cent), evolving their offering (35 per cent) and diversifying into new markets (32 per cent).

The Business Barometer, which questions 1,200 businesses monthly, provides early signals about economic trends both regionally and nationwide. A net balance of almost a third (32 per cent) of North East businesses expect to increase staff levels over the next year, up two points on last month.

Overall UK business confidence fell nine points during August to 16 per cent, its lowest level since March 2021.

Firms’ outlook on their future trading prospects was down 32 points to 5 per cent, and their optimism in the wider economy dropped six points to 6 per cent. The net balance of businesses planning to create new jobs also decreased five points to 16 per cent.

While every UK region and nation reported a positive confidence reading in August (except the South East, where confidence dropped 15 points to 0 per cent), only three recorded a month-on-month increase in optimism.

The three regions were the North West (up 26 points to 44 per cent), South West (up 12 points to 23 per cent) and Yorkshire (up nine points to 23 per cent), with the North West now the most optimistic region overall.

Steve Harris, regional director for the North East at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence across the North East remain steady, despite the economic headwinds firms are facing, such as rising costs, resulting supply chain disruption and skills shortages.

“At times like these, it’s crucial that companies take the necessary action to mitigate the impact of these challenges, and conserving cash, finding ways to reduce costs and being competitive on price should be a priority for the region’s business leaders.

“Financial tools such as arranged overdrafts, invoice finance and asset-based lending can help firms to prevent pressure points forming in the months ahead.”

By Matthew Neville – Correspondent, Bdaily

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