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Business & Economy

North East businesses most confident in the UK during July

Business confidence was highest in the North East out of all UK regions during July, rising 20 points to -3 per cent month-on-month.

The latest business barometer from Lloyds Banks found that the North East was the most upbeat region of the UK, outperforming the national average of -22 per cent.

Companies in the North East reported higher confidence in their business prospects month-on-month at 7 per cent and the survey marks the first time firms have expected business activity to increase in the year ahead since March.

The business barometer questions 1200 businesses monthly and provides early signals about UK economic trends.

The majority of companies continued to see demand negatively affected by coronavirus in July, with 57 per cent experiencing a fall compared to 70 per cent in June.

Meanwhile, 11 per cent experience an increase in demand, up three points on the month before.

With the Coronavirus Job Retention Scheme (CJRS) beginning to wind down from August, just over a quarter (27 per cent) of North East firms surveyed said they weren’t currently using the scheme.

When asked about social distancing measures, 49 per cent of respondents said they could operate at full capacity while remaining COVID-secure, although a fifth (21 per cent) said they couldn’t.

Of the 63 per cent of businesses reporting disruption to their supply chain during July, 29 per cent expected the situation to improve within three months, while just 3 per cent expect it would take more than 12 months to return to normal levels.

Paul Varley, regional director for the North East at Lloyds Bank Commercial Banking, said: “Confidence is something that’s been largely absent from the region, and across the UK, since before the lockdown in March.

“The North East was the only area of the UK where businesses expect trading activity to increase over the next 12 months, which is also encouraging to see.

“However, it’s clear that major challenges remain, with firms still facing weak demand and supply chain disruption.

“We’ll continue to stand by the side of local businesses as they navigate the road to recovery.”