BUSINESS confidence in the North-East fell 17 points during May to minus five per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the North-East report lower confidence in their business prospects at three per cent, compared with 24 per cent in April. When taken together with their views on the economy overall, this gives an overall confidence reading.

Across the region, a net balance of 25 per cent of businesses say they feel the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up six points on a month ago.

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: “Confidence in the-North East has seen a drop this month, as it has across the UK overall.

“We’re always by the side of businesses to help them navigate through various challenges presented. We’ve committed to lend up to £700m to support North East firms in 2019, and we’ll continue to offer our advice in developing their strategies for future growth.”

Across the UK, overall confidence slipped four points to 10 per cent as firms’ confidence in their own prospects fell six points to 17 per cent, while their economic optimism dropped two points to two per cent.

Businesses in Yorkshire and the Humber show the most confidence, at 23 per cent, ahead of the West Midlands (21 per cent).

Those in the East of England are the least confident, with an overall confidence of minus six per cent, 16 points below the national average.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Overall business confidence continues to sit below the long-term average.

“A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU. It’s encouraging to note that while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.”

Rise in manufacturing confidence

Confidence rose among manufacturing businesses for the second consecutive month, up five points to a four-month high of 21 per cent. The sector was the most confident in both trading prospects and economic optimism.

The services sector continued to report the weakest overall confidence (down five points to seven per cent) reflecting firms’ more negative economic optimism and the expected impact of the UK leaving the EU. Confidence also fell in construction (down three points to 12 per cent) and retail (down five points to 11 per cent).