BUSINESS confidence in the North-East bucked the national trend to rise two points during March to 23 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

The research, taken between March 2 an 16, showed that companies in the region had higher economic optimism at 14 points, but lower confidence in their business prospects at 31 per cent. Together, this gives an overall confidence of 23 per cent.

Across the UK, overall business confidence fell by 17 percentage points to six per cent in March, the lowest level since October 2019.

However, the report showed that nationally, for the second week of the survey, a much sharper fall in overall confidence was recorded at minus three per cent.

It matches the lowest dip seen by the barometer since December 2011 and is otherwise the lowest dip since March 2009 during the global financial crisis.

Responding specifically to the impact of the Coronavirus, 74 per cent of North-East businesses stated that they had already been affected or expected to be impacted, ahead of Boris Johnson’s initial call for the public to stay at home on March 16.

The data illustrates the impact that the outbreak was having on business confidence before many initiatives launched by the Government to help combat the virus were announced.

The Business Barometer questions 1,200 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: “The impact on the economy as a result of COVID-19 is difficult to accurately predict.

“It is encouraging, however, to see the continued resilience displayed by businesses across the North-East during these unprecedented times.

“For those firms directly impacted, we’ve set aside £2bn of arrangement fee free finance and committed to lend up to £18bn to businesses across the UK this year.

“We’re working by the side of businesses and government to provide the support required to navigate through this unprecedented period. We will continue to support firms across sectors from manufacturing to renewables in the coming weeks and months as we navigate the challenges presented by COVID-19.”

Businesses in the region were the most confident in the UK, ahead of the South West at 16 per cent, and London at 12 per cent.

Those in the South East were the least confident, with an overall confidence of minus ten per cent, 16 points below the national average.

In March, overall business confidence fell across all four sectors surveyed. Confidence in the retail sector saw the sharpest decline, falling 21 percentage points to nine per cent. The manufacturing sector also saw a big decline from 31 per cent to 11 per cent, services was down 18 points to one per cent, while the construction sector fell by 15 points to 14 per cent.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “The results in March demonstrate the impact of the shutdown of large swathes of the economy to combat the pandemic even in advance of the Government’s stringent measures announced in recent days.

“Sentiment has returned to historic low levels after improving in recent months. We will continue to monitor what businesses are telling us, and hope that they can take steps to minimise the impact of current economic downturn.”