Surveys from Lloyds and Grant Thornton show some signs of rising confidence among North West firms but with COVID-19 and Brexit still creating gloom and uncertainty. Tony McDonough reports
There was a rise in confidence among North West businesses in December but the region still recorded the lowest level of confidence in the UK.
According to the latest Business Barometer from Lloyds Bank Commercial Banking, business confidence in the North West was up 15 points to -13% in the month. This is in contrast to a rise of 17 point to -4% across the UK.
And in a separate survey from accountancy firm Grant Thornton, North West firms said they were more worried about the ongoing impact of the COVID-19 pandemic than they were about the looming Brexit deadline on December 31.
It reached that for the next six month, almost 60% of mid-market business leaders in the region said further COVID further lockdown restrictions would be bad for their business, versus 18% for Brexit.
In the Lloyds study, it was revealed a net balance of 15% of businesses in the region expect to reduce staff levels over the next year, down 14 points on last month.The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
All 12 UK nations and regions saw a rise in overall confidence during December. The most marked improvements were reported in Scotland (up 29 points to -9%); the South West (up 22 points to 5%) and the West Midlands (up 22% points to 4%). The North East, South West and West Midlands all moved into net positive territory for the first time since March this year.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “With the deployment of a vaccine underway and a viable COVID-19 exit strategy beginning to take shape, confidence has risen in the North West with a smaller share of companies expecting to reduce headcounts month-on-month.
“But challenges are clearly still weighing on the outlook of the region’s firms. No matter what the coming months may bring, we’ll continue to be by the side of businesses in the North West, providing the guidance and support they need as we head into the New Year, and beyond.”
The Grant Thornton study found that 19% of North West mid-market business leaders (polled over the first two weeks of December) expect Brexit to positively impact their business in the next six months, while 28% don’t expect it to impact them at all.
With the rapidly approaching transition deadline, 76% of North West mid-market business leaders feel either very or fairly confident in their preparations for the upcoming changes in 2021.
Carl Williams, North West managing partner for Grant Thornton, said: “There is a consensus in our region that a deal is preferable to a disorderly exit. Businesses in Liverpool are resilient and adaptable but crave certainty and what’s really important now is getting out information about the new arrangements – whatever they are.
“The Government is running a high profile Time is Running Out, campaign asking businesses to prepare. That’s fine as far as it goes, but not all the detailed information is available. The impacts will be felt in a wide range of ways, hitting different sectors, in different ways over the coming months.
“All business leaders have spent 2020 fighting the more immediate threats presented by the global pandemic. We see from the data that the big definable problems, such as further restrictions in terms of workplace safety, travel restrictions, people productivity, and looming regulatory changes, are higher up the mid-market leader’s list of potential threats than Brexit.”