BUSINESS confidence in the North-East continued to grow during April, rising two points to 12 per cent, the highest result for the region so far this year, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the North-East report higher confidence in their business prospects at 24 per cent, nine points above March’s results, but their optimism in the economy fell four points to zero per cent. Together, this gives an overall confidence of 12 per cent.

Despite being more confident about their own prospects, businesses’ hiring intentions fell, with a net balance of four per cent of businesses in the region now expecting to hire more staff during the next year, down three points on last month’s figures.

Meanwhile, a net balance of 19 per cent of businesses in the region said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, 15 points higher than last month.

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: “The North-East’s overall confidence has risen for a third month in a row, underpinned by a rise in firms’ confidence in their own trading prospects.

“Over the last month we’ve continued to see investment in the region’s future prosperity, including the announcement of the North-East as the location of one of 12 new Institutes of Technology, which will support the development of the local skills base.

“As part of our commitment to helping Britain prosper, we’ve pledged to lend up to £700m to North-East businesses in 2019, and we’ll be by firms’ side with our advice, as well as funding, to help support their ambitions for future growth.”

Across the UK, overall confidence climbed four points to 14 per cent as both firms’ optimism about the economy and their confidence in their own prospects continued to climb from lows recorded earlier this year.

Companies’ economic optimism rose to four per cent, while confidence in their own business prospects climbed three points to 23 per cent.

Businesses in the West Midlands showed the most confidence, at 28 per cent, ahead of the North West (20 per cent) and London (19 per cent).

Those in Wales were the least confident, with an overall confidence of minus one per cent, 15 points below the national average.

Nationwide, the overall confidence of firms in manufacturing, construction and services all improved – but retail sector confidence fell.

Manufacturing and construction confidence rose for the first time in three months, increasing six points to 16 per cent and two points to 15 per cent respectively. Services confidence increased by five points to 12 per cent.

Meanwhile, the retail sector – which posted the highest confidence in March – fell this month by six points, placing it on a par with the manufacturing sector at 16 per cent.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “While business confidence remains low when viewed against the historic average, it is certainly encouraging to see an increase in overall optimism for the second month in a row.

“Firms appear more positive about both their own trading prospects and the broader economy, although their assessment of the potential impact of the UK leaving the EU remains unchanged. We will have to wait and see whether this partial rise converts into a sustained recovery.”