North West business confidence rose by a meagre one point in December, to 50%, but ahead of overall UK confidence which dipped two points to 39%, and the second-highest of any UK nation or region after London (53%).
A net balance of 42% of businesses in the region also expect to increase staff levels over the next year, up two points on last month.
Looking ahead to the next six months, North West businesses identified their top target areas for growth as investing in their team, for example through training (45%), evolving their offering, for instance by introducing new products or services (42%) and entering new markets (32%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Overall UK business confidence fell two points in December to 39%, although remained above the long term average of 29%.
While firms’ confidence in the wider economy strengthened five points to 31%, their confidence in their own trading prospects fell eight points to 47%.
Although confidence fell in the service sector, this was partly offset by rises in manufacturing and retail, with these sectors swapping places in December.
Services fell from 46% to 35% in December – a fall of 11 points. In contrast, manufacturing and retail increased 10 points to 42% and 43%, respectively, thereby taking manufacturing and retail above services for the first time in four months.
Trading prospects for retail rose for the first time in three months, while construction confidence was steady at 41%, equalling last month’s result.
Jenny France, area director in the North West at Lloyds, said: “It’s encouraging that businesses in the North West ending the year with rising confidence.
“They’ll now be looking to build on this optimism with plans for fresh growth in 2025.”
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “In the last few months overall confidence has fallen incrementally, and in December the trend continued as it fell by two points to 39%.
“While there hasn’t been any significant one-month change, confidence has gradually drifted from the summer’s highs.”
He added: “The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects which have proven to be resilient over the last quarter.
“There was, however, more positivity regarding the wider economy and, going into 2025, this offers some hope if companies continue to feel confident about the economy.
“Elsewhere, although confidence fell in the services sector, this was partly offset by improvements in manufacturing and retail – which could be significant for this time of year.”
