TWO important new business surveys say the North East is in a strong position for growth.

Business confidence in the North East remained steady in October at 61%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies here reported lower confidence in their own business prospects month-on-month, down four points at 61%. When taken alongside their optimism in the economy, up three points to 60%, there was a headline confidence reading of 61%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

A net balance of 46% of businesses in the region expect to increase staff levels over the next year, down 12 points on last month.

Overall UK business confidence remained steady month-on-month dipping by just three points to 43% and remaining comfortably above the year-to-date average of 26%. Hiring intentions were unchanged on September’s reading at 37%, while firms’ optimism in the economy and confidence in their business prospects were down marginally.

All UK nations and regions reported positive confidence readings for the seventh consecutive month.

Firms in London (up three points to 65%), the North East (unchanged at 61%) and the East Midlands (up eight points to 55%) had the highest confidence readings, while businesses in the South East and Wales had the lowest overall confidence levels.

Steve Harris, regional director for the North East at Lloyds Bank Commercial Banking, said: “Despite recent headwinds – including materials shortages and supply chain issues – it’s encouraging to see levels of optimism hold firm across the North East.

"Many businesses are still looking to recruit, another clear indicator that regional recovery is on track.

“We know there will be challenges ahead but we’ll continue to back North East businesses as we work towards ending the year strongly.”

In the other poll of businesses, distress levels in the region and across the UK saw a sharp fall in the third quarter of 2021 compared to the previous quarter as the economy showed signs of recovery following the relaxation of Covid regulations this summer.

The latest Red Flag Alert data by nationAL business rescue and recovery specialist Begbies Traynor, revealed that for the three months to September 2021, there was a 15% decline in the number of ‘significantly’ distressed businesses in the region compared to the second quarter of 2021.

However, the figures also showed that there had only been a minimal fall of just 1% in the number of companies in ‘significant’ or early-stage distress compared with the same period the previous year- before the second national lockdown was imposed in November.

The new data shows that a total of almost 11,000 firms in the North East were displaying symptoms of ‘significant’ financial distress in the third quarter of 2021, referring to companies that have financial problems such as having minor county court judgements of less than £5,000 filed against them.


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