North East business confidence among highest in country, survey suggests

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Business confidence in the North East is among the highest in the country, according to a new survey.

The Lloyds Bank Business Barometer puts confidence levels in the North East at 46%, second only to the North West and the highest levels seen since the survey was expanded to its current form in 2018.

The barometer – which questions 1,200 businesses monthly and provides early signals about UK economic trends – puts the North East ahead of the national average, with UK business confidence tagged at a rating of 36%. The national score was itself the highest in four years.

Read more: other regions pull away from North East

The survey comes at a time of mixed performance in the regional economy, with optimism over the vaccine roll-out and the ending of pandemic restrictions balanced out by concerns over supply issues and post-Brexit exporting problems.

Recent employment figures have also raised concerns that the North East could be bouncing back slower from the pandemic than other parts of the country.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Business confidence reaching its highest level in over four years tells a positive story about the country’s economic recovery. This confidence is driven by the continued success of the vaccine rollout, the removal of lockdown restrictions and adjustments to self-isolation rules.

“Staff shortages remain a challenge, but as the economy moves back towards pre-pandemic levels we can be optimistic that the momentum for business confidence and economic optimism can be sustained in the months ahead.”

In sector terms, the survey found notable strength in areas of the economy benefiting from the further easing of Covid restrictions. Services confidence saw the greatest month-on-month increase, while confidence in both manufacturing and construction also picked up.

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Meanwhile, a North East insolvency expert has urged the company directors to make use of the final month of the Government’s furlough scheme to plan for the future and make sure they are not in financial problems.

Alexandra Withers, who is North East chair of insolvency and restructuring trade body R3, said many company owners had taken on debt or set aside costs during the pandemic, but now had to be sure their businesses were able to survive the return to normal trading.

Ms Withers, who is an associate solicitor in the insolvency department of Short Richardson & Forth Solicitors in Newcastle, said: “Directors only have another 30 days during which the Government will effectively underwrite a large percentage of their wage bill, and they need to use this time to identify any financial issues their business may face and explore their options for resolving them.

“It’s very hard to admit that your business is struggling, but starting the conversation as early as possible will mean you have more potential solutions available, and more time to make a decision about how you move forward.”

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Graeme WhitfieldRegional business editor