North East business confidence at an “all-time low”

Business confidence in the North East fell by 62 points during April to -39 per cent, according to the latest Business Barometer from Lloyds Bank.

The barometer questions 1200 businesses monthly and provides early signals about UK economic trends both regionally and nationally.

North East firms’ confidence of their own business prospects was -30 per cent, down from 31 per cent in March.

When taken alongside their views of the economy overall, this yields a headline confidence reading of -39 per cent.

The majority of firms in the region reported a significant decrease in demand for their goods and services, with 63 per cent seeing demand fall in April compared with 4 per cent who saw it rise.

The survey was conducted between March 31 and April 16, giving a good indication of what trading conditions are like under coronavirus.

It found that 39 per cent of businesses in the region were operating at below 50 per cent capacity, while 34 per cent weren’t operating at all.

It was also noted that with 66 per cent of firms reporting disruption to their supply chain during April, only 23 per cent expected the situation to improve within three months, while 11 per cent said it would take up to 12 months to return to normal levels.

Paul Varley, regional director for the North East at Lloyds Bank Commercial Banking, said: “Firms across the North East are feeling the impact of coronavirus. Falling demand and supply chain disruption is putting significant pressure on their operations.

“We’re working alongside customers to ensure they have the finance needed to weather current challenges, including £2 billion of arrangement fee-free finances and capital repayment holidays on loans for those that have been severely affected.”

Across the UK, overall confidence fell 38 points to -32 per cent, as optimism in the economy fell sharply.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, added: “The results in April demonstrate the full impact of the measures taken by the Government to shut down large parts of the economy to help contain the pandemic, with sentiment now matching the all-time low of December 2008.

“There are tentative signs that China’s economy is stabilising as it starts to ease lockdown measures, and that may serve as a template for the rest of the world.”