North East business confidence up on last month

• Business confidence in the North East rose 23 points to 69% in May.  

• Firms' optimism in their own trading outlook rose seven points to 65%, while optimism in the economy climbed 39 points to 74%. 

• Overall UK business confidence increased by 3% to 47%. 

 

Business confidence in North East saw a strong increase in May, rising 23 points to 69%, according to the latest Business Barometer from Lloyds. 

Companies in North East reported higher confidence in their own trading outlook month-on-month, up seven points at 65%. When taken alongside their optimism in the economy, up 39 points to 74%, this gives a headline confidence reading of 69% (vs. 46% in April 2026). 

This represents the strongest confidence level and biggest monthly jump across England. It is the second highest confidence reading for North East businesses in the last five years, up four points compared to May 2025.  

North East firms’ confidence in their own trading outlook was driven by stronger customer demand and expected new contracts or clients (65%), while confidence in the economy was driven by industry-specific improvements (60%). 

A net balance of 50% of businesses in the region also expect to increase staffing levels over the next year, up two points on last month. 

Since May 2025, the North East has had an average overall business confidence of 57% with its largest figure of 73% in July last year and its lowest of 40% in January 2026.   

Looking ahead to the next six months, North East businesses identified their top target areas for growth as investing in their team, for example through training (51%), introducing new technology, such as AI or automation (50%), and investing in sustainability (40%). 

Martyn Kendrick, Regional Director for the North East at Lloyds said: “This marks a rebound from last month, with business confidence increasing in terms of trading prospects, the wider economy and businesses’ plans for growth. 

“What’s encouraging is that firms are matching optimism with decisive action. Half plan to invest in new technology and automation, highlighting the North East’s ambition, resilience and confidence in its future. 

“We’re committed to supporting that momentum - whether through finance, specialist expertise or helping businesses embrace change and unlock new opportunities for growth.” 

 National Picture 

Overall, UK business confidence rose three points in May to 47%.  

Firms’ trading outlook rose four points to 58% and their optimism in the economy generally rose two points to 35%. 

Sixty-six percent expect stronger output over the year ahead, while 8% predict weaker activity.   

The main drivers behind businesses expecting a decrease in activity remain the same as in April; economic uncertainty, higher cost pressures and weaker customer demand.   

Business confidence rose across seven of the twelve UK regions and nations in May, and decreased in four. Northern Ireland saw notable gains with North East and West Midlands becoming the most confident regions. 

Amanda Murphy, CEO for Lloyds Business and Commercial Banking said: “Business confidence edged up modestly in May, suggesting firms are beginning to steady after April’s decline. This month, confidence levels from businesses in the North East particularly stands out. It's also reassuring to see that increased confidence from the construction sector has brought them more in line with their retail, services and manufacturing counterparts. 

“Across the UK, each region and nation presents unique opportunities and drivers of growth - whether that’s clean energy in the North East, advanced manufacturing in the West Midlands or tourism and hospitality in Scotland. We've seen first-hand what the right financial support and advice can do for ambitious businesses and are keen to continue supporting our customers as they grow - helping Britain prosper.”