Business leaders in the North East have retained confidence in the months ahead, making the region the country's most optimistic, research suggests.
Researchers compiling the Business Barometer survey from Lloyds Bank Commercial Banking found regional firms' overall confidence was unchanged in December, at 48%. The consistency was helped by a six point bounce in firms' outlook on their own prospects which reached 57%.
Meanwhile their optimism in the wider economy fell four points to 42%. The survey, which took into account responses between the end of November and mid-December, pointed to a 31% net balance of businesses across the North East with intentions hire more staff over the next year. That was a rise of six points on November and in contrast to the national picture in which showed hiring intentions had dropped slightly to 29%.
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Respondents identified their top priorities for the first half of 2024 as evolving their offer (52%), investing in staff (38%) and entering new markets (29%). Nationally, service sector firms reported a rapid fall in confidence - down 16 points to 30% - while retail and construction firms showed optimism at 44% (up two points) and 37% (up two points) respectively.
Martyn Kendrick, regional director for the North East at Lloyds Bank Commercial Banking, said: “The economic landscape is a challenging one for businesses, but the North East has shown real resilience this year. The unchanged confidence levels this month coupled with plans to increase investment in teams through training and new hires is reflective of how growth is on the agenda for local firms. Larger companies like Nissan have also shown their confidence in the region, recently announcing plans to triple its investment in electric vehicle production.
"That’s why it’s encouraging to see local firms planning future investment in upskilling employees which will prepare them to capitalise on the expected inward investment, as well as new growth opportunities within their own organisations. We’ll continue to be by the side of firms across the region as we work towards a year of growth.”
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “This December data was collected following several key announcements, including energy prices rises and the UK economic outlook being revised down in the Autumn Statement. All of this will undoubtedly have had an impact on business confidence as we head into 2024. Businesses are also balancing cost pressures with a challenging labour market that will see increases to minimum wage in April 2024, as perhaps indicated in the wage growth figures, at a time when they are managing staff retention and recruitment decisions.
“However, over the course of the year confidence has steadily increased from an average confidence of 25% in the first three-months of 2023 and ending the year with a three month average of 39% - an indication of the positive trajectory business has seen this year. This provides a healthier position to begin 2024 with, compared to 2023.”
