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North East business confidence slides in June but remains above national average

Business confidence fell three points in the North East during June to -23 per cent but remained above the UK average of -30 per cent.

The latest Lloyds Bank Business Barometer shows companies in the North East reporting lower confidence in their business prospects month-on-month at 13 per cent, which, when taken alongside views on the economy overall, gives a headline reading of -23 per cent.

When asked about the impact of coronavirus on their business, one third of respondents (33 per cent) said they expected to be operating at more than 50 per cent of capacity by the end of June, though almost a fifth (18 per cent) didn’t expect to be operating at all.

41 per cent expect to be operating at pre-COVID levels within three months, while 11 per cent expect it to take more than 12 months.

The majority of firms continued to see demand negatively affected during June – a worsening picture month-on-month.

70 per cent experienced a fall in demand for their products and services, up seven points on May. Only 8 per cent of firms experienced an increase in demand, up three points on the month before.

Of the 69 per cent of businesses reporting disruption to their supply chain during June, almost a quarter (23 per cent) expected the situation to improve within three months, while only 2 per cent expected it would take more than 12 months.

The Business Barometer questions 1200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Paul Varley, regional director for the North East at Lloyds Bank Commercial Banking, said: “North East businesses continue to face significant pressures, and many are still grappling with reduced demand.

“The reopening of retail in June, followed by hospitality in July, are each big steps forward that should buoy confidence in the coming weeks.

“We’ll continue to be by the side of businesses to help ensure they’re on the strongest possible footing on the road ahead to recovery.”