In July, business confidence in the North West took a hit, dropping by 10 points to 33%. This decline contrasts sharply with the overall UK scenario, where national confidence levels have risen.
Despite the lower confidence levels, North West businesses remain focused on growth, targeting investments in team training, new product developments, and technological advancements. However, their optimism in the broader economy has also dwindled.
Decline in Confidence
Business confidence in the North West dropped significantly in July, decreasing by 10 points to 33%. This decline stands in contrast to the overall UK picture. Companies in the region felt less confident about their business prospects, which fell by 10 points to 39%.
When factoring in the reduced optimism in the economy, which also dropped 10 points to 26%, the headline confidence reading was notably lower than the previous month’s 43%. Despite these drops, businesses in the North West have plans for growth.
Growth Targets
North West businesses are looking to the future with specific growth targets. They aim to invest in their teams, with 38% focusing on training. Additionally, 33% of businesses plan to evolve their offerings by introducing new products or services.
Another 31% are looking to adopt new technologies to stay competitive. These steps, though ambitious, are seen as essential for long-term success in the region.
The Business Barometer Survey
The Business Barometer is a monthly survey conducted by Lloyds Bank Commercial Banking. It provides early insights into UK economic trends both regionally and nationwide. The survey involves 1,200 businesses, offering a comprehensive view of the business climate.
Chris Whittle, the area director in the North West at Lloyds Bank Commercial Banking, commented on the findings. He noted that the plans for team investment could lead to long-term benefits for companies. Sharing and transferring skills could positively impact the regional economy.
National Trends
Nationally, business confidence showed a different trend. In July, the overall UK business confidence climbed nine points to a net balance of 50%. This level matched the confidence seen in May, which was an eight-year high.
Confidence in trading prospects also rose, increasing by 12 points to 56%, the highest reading since April 2017. Additionally, confidence in the broader economy grew by six points to 45%.
The most confident regions in the UK were Wales and the East Midlands, both at 62%, followed closely by the East of England at 61%.
Sector-Specific Growth
July saw improvements across all sector categories in the UK. The retail sector experienced a significant boost, rising by 25 points to 60%, marking its highest level since the pandemic.
The manufacturing sector also saw gains, with its trading prospects increasing by nine points to a two-year high. The services sector wasn’t left behind, rising 10 points to 56%.
Construction had a smaller but notable increase, growing by two points to 44%. These improvements suggest a broad-based recovery across different parts of the UK’s economy.
Impact on the North West Economy
The drop in confidence in the North West is a concern for the region’s economy. However, the plans for growth and investment in human resources could mitigate some of these concerns. Long-term investments in skills and innovation are crucial.
Chris Whittle emphasised the importance of these investments. He believes that they could have a ripple effect, benefiting not just individual companies but the regional economy as a whole.
Looking Ahead
Despite the current dip in confidence, the outlook isn’t entirely bleak for North West businesses. By focusing on growth in their teams and adopting new technologies, they can prepare for future challenges.
The region’s businesses are taking proactive steps to ensure long-term success. As they invest in their people and innovate their product offerings, they hope to see a rebound in confidence and economic performance.
The decline in business confidence in the North West is notable. However, the focus on investing in teams and introducing new products and technologies provides a glimmer of hope.
By embracing growth and innovation, the region can potentially recover and even thrive in the future.