Business confidence in the North East rose 18 points during November to 30 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the North East report higher confidence in their business prospects, up 16 points to 35 per cent, and higher economic optimism, which rose 20 points to 25 per cent.
However, companies’ hiring intentions showed a net balance of 19 per cent of businesses in the region expect to hire more staff during the next year, down one point on last month.
Nationally, overall confidence bounced back, climbing five points to 24 per cent as firms’ optimism about the economy rose nine points to 17 per cent. Companies’ confidence in their own business prospects rose two points to 31 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Kelly Green, regional director for the North East at Lloyds Bank Commercial Banking, said: “It’s encouraging to see that, as optimism about the economy as a whole grows, firms across the North East are also reporting a significantly more positive outlook in their own prospects for the year ahead.
“The Chancellor’s announcement last month of measures to support local growth, including the creation of the UK’s first Special Economic Area in South Tees, was positive news for the region, while businesses appear to have been buoyed by the prospect of greater economic clarity as well.
“However, it’s interesting to note that this growing optimism has not led to an increase in the number of firms planning to create new jobs, suggesting that some caution remains.
“As we enter the busy Christmas trading period, it’s important that companies of all sizes look at how they can build on this optimism by investing in their own businesses, both in their operations and their staff.”
Across the region, a net balance of four per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity. This compares with a net balance of six per cent of business who felt it would have a positive impact on their business activity a month ago.
Businesses in Yorkshire showed the most confidence, at 43 per cent, ahead of the West Midlands (39 per cent) and London (34 per cent).
Those in the East Midlands were the least confident, with an overall confidence of 10 per cent, 14 points below the national average.
Firms in the manufacturing sector saw the largest increase overall, rising by 11 points to 32 per cent, while construction also registered a significant improvement of seven points to 29 per cent.
Retail confidence edged up by one point to 30 per cent, while other services rose five points but still continued to lag behind other sectors at 20 per cent.
Concerns about the impact of leaving the EU were the highest in manufacturing and other services.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Following last month’s dip, with business confidence reaching its lowest level since August 2017, it is reassuring to see that business confidence has picked up, helped by stronger economic optimism and hopes of a Brexit deal.”