North East business confidence falls 11 points in June

Despite this drop in overall confidence, companies in the North East reported a rise in confidence in their individual business prospects, which increased by 14 points to 79 per cent.

However, their optimism about the economy decreased by 37 points to 28 per cent.

This resulted in a headline confidence reading of 54 per cent, compared to 65 per cent in May.

A net balance of 54 per cent of businesses in the region expect to increase staff levels over the next year, which is an increase of two points from last month.

Looking ahead, North East businesses identified their top growth areas for the next six months as investing in their team, entering new markets, and evolving their offering.

Martyn Kendrick, regional director for the North East at Lloyds, said: “While overall confidence in the North East dipped this month, it remains above the UK average.

“And local businesses are increasingly optimistic when it comes to their own business prospects – a reflection of the hard work they’ve put in to drive growth and build resilience.

“As firms look ahead to the next steps, we’ll continue to provide our support to help them achieve their ambitions.”

Nationally, UK business confidence increased by one point in June to 51 per cent.

Firms’ optimism in their own trading prospects strengthened by one point to 57 per cent, while their confidence in the wider economy also rose by one point to 45 per cent.

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: “Business confidence has continued its positive momentum, following the significant gains we saw in May.

“In particular, the sustained rise in hiring intentions suggests that while firms do still face challenges, they may be starting to look beyond short-term staffing needs and preparing for future growth.”