North West business confidence falls following Brexit vote

Companies across the region fear a fall in demand for their goods and services following the UK public’s vote to leave the EU.

Business confidence is falling across the North West
Business confidence is falling across the North West

Uncertainty over the prospects for the UK economy caused by Brexit has led to a fall in business confidence across Merseyside and the North West, a new report says.

The latest Business in Britain report from Lloyds Bank adds firms in the region fear a fall in demand for their goods and services.

The report’s confidence index – an average of respondents’ expected sales, orders and profits over the next six months – has declined 26 points to 14% in North West since the previous survey in January 2016.

Economic uncertainty poses greatest risk

The most commonly identified threat chosen by companies in the North West over the next six months was economic uncertainty, which was cited by 27% of firms, closely followed by  weaker UK demand, which was mentioned by 25%.

International trade

The net balance of North West exporters expecting an increase in total exports across the globe fell by 15 points to 28%, reflecting large decreases in firm’s confidence around exporting to Europe and Africa compared with January’s report.

Exporters’ desire to continue selling to the US and Canada fell only slightly suffering just a two point decrease, due to by a larger fall in the value of sterling against the dollar than when compared with the euro.

Martyn Kendrick, regional director for SME Banking in the North West, at Lloyds Bank Commercial Banking, said: “Business confidence in the North West has taken a hit since January but this should be viewed in the context of the recent economic and political shocks.

“The EU referendum vote has introduced a level of uncertainty for companies across the region as the UK decides on the best model for its future relationship with the EU, and this is likely to continue in the short term.

“This is reflected in the dramatic fall in the number of North West firms looking to increase trade with Europe over the next six months, with a big shift towards Latin American markets.”

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