North East Business Confidence Soars Above National Levels
Business confidence in the North East region has experienced a significant surge in February, with new data indicating a robust economic turnaround. According to the latest Business Barometer from Lloyds Bank, overall confidence levels climbed by 15 percentage points to reach 55%, markedly outperforming the national average of 44%.
Strong Hiring Intentions and Growth Targets
A majority of businesses, specifically 57%, have expressed plans to increase their staff levels over the coming year. This represents a notable 13-point increase compared to the previous month. Looking ahead to the next six months, North East companies have identified key growth areas, including investing in their workforce and evolving their offerings through new products, services, or market expansions.
Sector-Specific Confidence Trends
Nationally, the construction sector demonstrated the strongest gains in overall confidence, while manufacturing also saw a positive boost. In contrast, confidence within the retail and service sectors softened slightly, declining by two and three points respectively.
Martyn Kendrick, regional director for the North East at Lloyds Bank, commented: "It's encouraging to see a rise in North East business confidence, with firms in the region feeling more positive about their own trading prospects as well as the economy itself. It's particularly good to see hiring and training so high on many firms' agendas."
Kendrick highlighted the recent announcement of a new MTC Training advanced manufacturing centre coming to Tyneside, which is expected to strengthen the region's capabilities in this key sector. Lloyds Bank is backing this initiative as part of its support for businesses of all sizes and sectors in the North East.
Broader Economic Context and Challenges
This positive data follows a separate survey from last week, which indicated that growth in the UK's private sector gained further momentum in February. Manufacturers benefited from the largest surge in export orders since 2021. However, the S&P Global flash UK composite purchasing managers' index also pointed to ongoing job losses, with unemployment in the North East recently reaching a ten-year high.
Hann-Ju Ho, senior economist at Lloyds Commercial Banking, noted: "It's encouraging to see optimism in the wider economy returning, although with a small reduction in firms' confidence in their own trading prospects. The majority of the survey results were collected following the Bank of England's close decision to hold interest rates at its February meeting, signalling potential easing ahead, which may have alleviated business concerns, including those around cost pressures."
Ho also mentioned that the rise in pricing expectations to a six-month high suggests firms may be looking to rebuild their margins in 2026. The increased confidence among manufacturers and construction firms is viewed as particularly positive for UK economic growth.
