Business confidence in the North East has risen, with firms reporting growing optimism about their trading prospects and plans to expand their workforce.
The latest Business Barometer from Lloyds shows overall business confidence in the region climbed by five points in September to reach 50 per cent.
This was driven by a significant increase in trading outlook, which rose by 14 points to 70 per cent.
The national picture (Image: Supplied)
Martyn Kendrick, regional director for the North East at Lloyds, said: "It’s encouraging to see North East businesses feeling more confident and enthusiastic about their own trading outlook, supported by strong customer demand.
"Almost half of firms expect to grow their teams over the next year, while many are looking to enter new markets, develop their people and invest in sustainability.
"Businesses remain focused on practical opportunities for growth, and we’ll continue to support them as they invest, adapt and plan for the future."
Confidence in the wider economy fell two points to 31 per cent despite the overall improvement.
Together, the figures produced headline confidence of 50 per cent, up from 45 per cent in August.
Strong customer demand fuelled confidence for 65 per cent of firms, while 55 per cent pointed to improvements in their sector.
A net 47 per cent of firms expect to hire more staff over the next year, up 17 points on the previous month.
But North East business confidence remains below its 12-month average of 56 per cent.
Confidence peaked at 75 per cent in July.
Over the next six months, 57 per cent of North East firms plan to enter new markets to grow.
Other priorities were team training, cited by 52 per cent, and sustainability investment, cited by 37 per cent.
The Business Barometer surveys 1,200 businesses each month to track UK economic trends.
Across the UK, business confidence fell 12 points to 41 per cent, its lowest level since April 2025.
That followed a reading of 53 per cent in August, the second-highest figure this year.
Confidence remains above its 30 per cent long-term average but is six points below the 12-month average of 47 per cent.
The fall was largely driven by weaker economic optimism as firms worried about rising energy costs linked to renewed Middle East tensions.
Firms’ trading outlook fell eight points to 50 per cent, below its 12-month average of 56 per cent.
A majority of firms—57 per cent, down nine points on August—still expect output to rise over the next year. Just seven per cent expect it to fall.
Firms expecting weaker activity blamed economic uncertainty, rising costs and falling customer demand.
Amanda Murphy, chief executive of Lloyds Business and Commercial Banking, said: "While confidence among larger firms remains strong, smaller businesses have seen a fall in sentiment as they continue to navigate higher costs, inflationary pressures and global uncertainty.
"Ensuring smaller firms can share in future growth will be crucial in the months ahead."