Business in Britain reports from Lloyds Bank reveals its confidence index – average expected sales, orders and profits over the next six months – increased to 26% from 15% in January. Tony McDonough reports
Data collected since the General Election was called in April shows business confidence is rising in the Liverpool city region and across the North West despite growing worries over recruitment.
The latest Business in Britain reports from Lloyds Bank reveals its confidence index – an average of respondents’ expected sales, orders and profits over the next six months – increased to 26%, from January’s score of 15% and 14% following the EU referendum vote.
It shows the North West is feeling more optimistic than neighbours Yorkshire and the East Midlands, but fell behind Wales in terms of confidence.
The index calculates the ‘net balance’ – the difference the percentage of firms that are positive in outlook against those that are negative.
It can vary between -100 if all firms are negative and 100 if all firms are positive, 0 is neutral.
Martyn Kendrick, regional director for Lloyds Bank Commercial Banking, said: “Confidence has risen significantly over the past 12 months, when it fell to just 14% following the EU referendum vote.
“The fact that this has happened despite the political uncertainty from a snap election is a positive sign for underlying confidence in the region.”
Overall, the share of North West firms naming political uncertainty and weaker UK demand as potential threats fell slightly to 10% and 16% respectively.
However, the number of firms concerned about weaker UK demand fell significantly compared with last September, dropping nine percentage points from 25%.
The proportion of North West firms that said that they had experienced difficulty in recruiting skilled labour in the last six months, however, increased to 50% compared with 30% in January.
The share of firms reporting challenges in recruiting unskilled labour also rose to 31% from 8%.
Despite recruiting challenges, the net balance of firms expecting average pay to rise in the next six months rose to 24% from 13%, suggesting companies are taking a cautious approach to hiring and pay.