BUSINESS confidence in the North-East rose nine points during January to 20 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 at 21 per cent and higher economic optimism at 19 per cent. When taken alongside their views of the economy overall, this gives an overall confidence of 20 per cent.

Businesses’ hiring intentions showed that a net balance of 14 per cent of businesses in the region expect to hire more staff during the next year, up six points on last month.

Across the UK, overall confidence rose 13 points to 23 per cent as firms’ optimism in the economy soared 22 points to 24 per cent, while confidence in their own prospects increased four points to 22 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 such a significant shift in confidence for the North-East. There are many exciting prospects ahead for the local economy, such as employers like Amazon creating hundreds of new jobs in areas like County Durham.

“As the fog of uncertainty begins to lift, firms will be looking to revive growth plans that they might previously have put on hold. We anticipate lending up to £700 million to firms in the region in 2020 as we work by the side of North-East businesses to fuel growth.”

Across the region, a net balance of eight per cent of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, compared to the previous month when a balance of four per cent said the impact was negative.

Businesses in London had the highest confidence at 38 per cent, ahead of the South West at 34 per cent, and the East Midlands at 31 per cent.

Those in Scotland were the least confident, with an overall confidence of minus four per cent, 27 points below the national average.

In January, overall business confidence saw a marked improvement in the construction and services sector with construction increasing 15 points to 27 per cent, while services increased 17 points to 21 per cent. Confidence in the retail sector increased by two point to 24 per cent, while the manufacturing sector saw a decrease of six points to 21 per cent.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “After a turbulent 2019, it is encouraging to see a solid rise in overall business confidence to start the new decade. These results, if sustained, could signal a stronger economic growth at the start of 2020, although risks to the central outlook remain.”