Business confidence in the North East rose five points during September to 50%, according to the latest Business Barometer from Lloyds.

Companies in the North East also reported higher confidence in their own trading outlook month-on-month, up 14 points at 70%. When taken alongside their optimism in the economy, down two points to 31%, this gives a headline confidence reading of 50% (vs. 45% in August 2026).

North East firms’ confidence in the economy was driven by strong customer demand (65%) and industry specific improvements (55%), while confidence in their own trading outlook was also driven by strong customer demand (71%) as well as improved economic conditions (39%).

A net balance of 47% of businesses in the region also expect to increase staff levels over the next year, up 17 points on last month.

Business confidence in the North East now sits below the 12-month average of 56%, with its highest figure this year of 75% in July.

Looking ahead to the next six months, North East businesses identified their top target areas for growth as entering new markets (57%), investing in their team through training (52%), and investing in sustainability (37%).

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.

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.

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Overall, UK business confidence fell 12 points to 41% in September, the lowest level since April 2025.

This decline follows August’s reading of 53%, the second highest recorded this year, and buoyant results since May. While confidence remained well above the survey’s long term average of 30%, it was six points below the 12-month average of 47%.

The overall 12-point decline, which was comparable to the fall recorded earlier this year following the start of the Middle East conflict, was driven by a fall in economic optimism, as businesses responded to higher energy prices as a result of renewed tensions in the Middle East.

Businesses’ own trading outlook declined eight points to 50%, compared to a 12-month average of 56%. The majority of businesses (57% down nine points from August) expect an increase in output over the year ahead, while those expecting a decrease in activity reduced by one point to 7%. Among firms expecting weaker activity, the main drivers were economic uncertainty, higher cost pressures and weaker customer demand.

Amanda Murphy, CEO for 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. Overall confidence remains above its long-term average, and most businesses still expect activity to grow over the coming year, underlining the resilience of UK firms. Ensuring smaller firms can share in future growth will be crucial in the months ahead."