Business confidence in the North West fell by three points during July to 52%, according to the latest Business Barometer from Lloyds.

While firms’ optimism in their own trading prospects remained unchanged at 52%, their optimism in the wider economy fell by five points month-on-month to 52%. Taken together, this gives a headline confidence reading of 52% (vs. 55% in June).

Looking ahead to the next six months, North West businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (55%), entering new markets (39%) and introducing new technology, such as AI or automation (36%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

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Overall, UK business confidence increased one point in July to 52% – its highest level since 2015 and the third consecutive monthly increase.

Firms’ optimism in their own trading prospects rose one point to 58%, while their confidence in the wider economy increased two points to 47%

Wales was the most confident UK nation or region for the second month in a row (76%), followed by the North East (73%).

July saw the service sector’s confidence increase by 11 points to 61%, one of the main drivers behind this month’s overall increase in business confidence, indicating strong momentum in the sector. This gain was partially offset by declines in other areas, with retail firms down eight points, manufacturers down four points and the construction sector down six points.

Chris Whittle, area director in the North West at Lloyds, said: “Despite a slight dip in overall confidence, it’s encouraging to see that firms’ expectations for their own trading prospects have held steady.

“Businesses across their region are pressing ahead with ambitious growth plans. We recently helped Oldham manufacturers R Tindall invest in advanced robotics to automate its processes, and we’ll continue to be ready to support others just like them when it comes to taking the next steps in their strategies.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “This continued upward trend reflects a growing sense of cautious optimism across the UK economy, underpinned by both improved trading prospects and broader economic sentiment. Despite ongoing cost pressures, firms are positioning for growth, particularly in services where hiring and investment plans are accelerating.

“Overall business confidence remains buoyant, with firms well placed to take advantage of opportunities such as new markets, adopting new technology and workforce expansion amid evolving market conditions.”