Confidence grows in North East

Business confidence in the North East rose 19 points during May to -20%, making the region the least pessimistic in the UK, according to new figures.

The latest business barometer from Lloyds Bank Commercial Banking shows companies in the region reporting higher confidence in their prospects at -3%, a rise of 27 points on April’s figure.

When taken alongside their views of the economy overall, this gives a headline confidence reading of -20% matched by London (-20%).

The Business Barometer questions 1,200 businesses monthly.

In an illustration of the impact COVID-19 is having on the region’s business, the majority of firms continued to see a fall in demand during May, but the picture has improved slightly since April.

The number of firms in the region operating at less than 50% capacity fell one point to 38% and more than a quarter (27%) of firms weren’t operating at all – a decrease of seven points on April.

Of the 66% of businesses reporting disruption to their supply chain during May, 23% expected the situation to improve within three months, while just 2% expected it would take more than 12 months to return to normal levels.

Paul Varley, regional director for the North East at Lloyds Bank Commercial Banking, said: “Despite ongoing uncertainty and disruption, it’s encouraging to see very early green shoots of returning confidence this month.

“North East firms have been hit hard by the pandemic but we know they have their eyes set on the future. “