Businesses in the North West reported higher confidence in their business prospects month-on-month, up 15 points to 30%. When taken alongside their optimism in the economy, which grew for a fifth consecutive month and was up 12 points to 48%, this gives a headline confidence reading of 43% – the highest level recorded in the region since April 2018.
Meanwhile, firms’ hiring intentions showed that a net balance of 16% of businesses in the region expect to recruit more staff during the next year, up 13 points on last month.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Nationally, overall UK business confidence surged 14 points in April to 29%, the highest reading since September 2018. The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further restrictions easing in Wales and Scotland. Companies’ confidence in their own business prospects rose by 14 points to 26%, while optimism in the economy increased by 15 points to 32%.
Most UK regions and nations reported a month-on-month increase in confidence during April, with firms in the South West (up 22 points to 30%), London (up 20 points to 32%), the East Midlands (up 20 points to 40%) and Yorkshire and the Humber (up 20 points to 32%) reporting the largest surges. No nation or region reported a fall in confidence, and none reported a net-negative confidence reading for the first time since July 2019.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “The re-opening of businesses and, in particular, the hospitality sector, has provided an enormous boost to regional confidence, with figures surging to levels not seen in the North West for three years.
“This rise comes as a result of the region’s continued resilience during the pandemic, which is now beginning to pay dividends as restrictions ease. We remain by the side of businesses in the North West as they continue to navigate the road ahead and plan for future growth.”
Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs. Manufacturing stood out as the most positive sector (40%), likely reflecting strong global demand and notwithstanding ongoing supply chain issues. Meanwhile, retail confidence jumped to 39%, while construction confidence also increased to 28%. Services confidence rose to 25%, which was also the highest it has been since 2018.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead.
“While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of COVID-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”
