Business confidence in the North East has reached its highest level in years, with firms reporting significant optimism about trading conditions and the broader economy. A recent survey by Lloyds Bank Business Barometer shows a substantial 23-point rise in confidence in May, reaching 69 per cent, with 65 per cent of businesses expecting a positive trading outlook.
Key Takeaways
- Business confidence in the North East has surged to its highest level in years.
- Confidence in the wider economy climbed even more sharply, making the region the most optimistic in England.
- Firms are planning significant investments in new technology, automation, and workforce development.
- Stronger customer demand and expectations of securing new contracts are key drivers of this optimism.
Regional Optimism Soars
The Lloyds Bank Business Barometer revealed a 23-point increase in confidence across the North East in May, bringing the figure to 69 per cent. Confidence in the wider economy saw an even more dramatic rise, up 39 points to 74 per cent, positioning the North East as the most optimistic region in England. This marks the second-highest confidence level recorded in the region over the past five years.
Martyn Kendrick, regional director for the North East at Lloyds Bank, commented on the rebound, stating, "This marks a rebound from last month, with business confidence increasing in terms of trading prospects, the wider economy and businesses’ plans for growth." He added, "What’s encouraging is that firms are matching optimism with decisive action."
Investment and Growth Plans
Businesses in the region are not just feeling optimistic; they are acting on it. Half of the surveyed firms plan to invest in new technology and automation, reflecting the North East’s ambition and confidence in its future. This commitment to innovation is a key indicator of future growth.
Key priorities for the next six months include:
- Workforce Investment: 51 per cent of firms identified investing in their workforce, such as through training, as a key objective.
- Technology Adoption: Half of the businesses plan to adopt new technologies, including artificial intelligence and automation.
- Sustainability: 40 per cent of firms are aiming to improve their sustainability practices.
Drivers of Confidence
The surge in optimism is largely attributed to stronger customer demand and the expectation of securing new contracts or clients. Sixty-five per cent of businesses cited these factors, while 60 per cent pointed to industry-specific improvements.
Furthermore, a net balance of 50 per cent of North East businesses intend to increase staffing levels over the coming year, a two-point rise from the previous month. This indicates a strong outlook for job creation within the region.
National Context
Nationally, UK business confidence also saw a modest increase, rising by three points to 47 per cent in May. While the North East stands out, other regions like Northern Ireland and the West Midlands also reported high confidence levels. Amanda Murphy, CEO for Lloyds Business and Commercial Banking, noted the distinct growth opportunities across different regions, highlighting clean energy in the North East as a significant driver.
Sources
- North East firms have growing business confidence, says survey, The Northern Echo.
