North East businesses are more confident about their region’s economic growth prospects than firms in any other part of the UK, according to new findings from the Lloyds Business Barometer.

Nine in ten (90%) are confident the North East will see economic growth over the next three years, with 14% feeling very confident. This is the highest confidence level in the UK, closely followed by 89% in the South East, with a UK average of 82%.

The findings also reveal that 44% agree that growth in the region will outperform the national economy over the next 12 months, while 43% disagree. This places the region just behind the South East (45%) and level with Yorkshire and the Humber (44%).

Among North East firms confident about growth over the next three years, the leading anticipated driver is investment in communities, such as town centre regeneration and housing (46%). This is followed by a local planning regime supportive of business development and growth (41%) and access to finance and investment capital (34%).

Almost half (49%) of North East firms feel the region receives its fair share of public investment, while a fifth (22%) of businesses surveyed say they have witnessed notable growth in the region over the previous three years.

Overall, 86% of North East firms say the regional economy has grown during the past three years. Among those businesses, 36% attribute this to a local planning regime supportive of business development and growth. Investment in apprenticeship schemes (35%) and access to finance and investment capital (33%) are the next most-cited factors.

One in ten (10%) North East businesses say the regional economy has declined over the past three years, below the UK average of 13%.

The Lloyds Business Barometer survey is made up of 1,200 UK firms from across all nations, regions and sectors.

North East businesses are approaching the next three years with real confidence, recording the most positive growth expectations anywhere in the UK. That optimism is encouraging and reflects the ambition we see among firms across the region.

Businesses are also clear about what is needed to turn confidence into sustained growth: investment in communities, a supportive local planning regime and access to finance can help firms expand, create jobs and deliver new opportunities.

It is particularly positive that a large proportion of businesses in areas with a combined authority or elected mayor expect local leadership to support economic growth over the next three years. By continuing to bring businesses, regional leaders and communities together, we can help translate the North East’s confidence and potential into long-term prosperity.

The national picture

More than four in five UK businesses are confident in their regional economic growth in the next three years, with planning and investment in community and transport reported as the key drivers of future regional economic growth, but there is a divide in how businesses perceive public investment is distributed across the UK.

Confidence was highest in the North East, where 90% of businesses expect regional economic growth, followed by the South East at 89% and the North West at 88%.

When businesses were asked about public investment in their region, 85% of London firms perceive their region receives its fair share. This falls to 37% of businesses surveyed in Yorkshire and the Humber and 38% for businesses in Wales. This compares to 64% of all businesses across the UK who perceive their region receives its fair share.

Meanwhile, 62% of businesses in London think it will outperform the UK economy in the next 12 months, the highest proportion surveyed. By comparison, only 28% of businesses in the East Midlands and South West believe their region will outperform the UK economy, followed by 31% in Scotland, 34% in Wales and 37% in the East of England.

Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Businesses across the UK are telling us they see opportunities to grow.

"Turning this ambition into action requires public and private investment working together to create the right environment for growth.

"Whether its investment in infrastructure, skills, innovation or research, businesses have a clear view of what they need locally to drive growth.

"Every region and nation has its own unique strengths and, by building on these, businesses will have the confidence to invest, create jobs and unlock their full potential."