Business confidence in the North East has reached a two-year high in Q1 2024, a survey of business leaders published today has found. 

Sentiment tracked by ICAEW’s Business Confidence Monitor found that at 13.4 confidence was strongest in the North East since Q4 2021 and double the historic average for the region.

Nationally, business confidence more than tripled to 14.4 on the index, surpassing the pre-pandemic average for the first time in two years, as economic conditions improved. The boost was likely underpinned by positive sales and exports projections for the next 12 months.

While the BCM reported a fall in domestic sales growth to 2.5% year-on-year to Q1 2024, North East businesses expect growth to increase in the next 12 months to 5.5%, above the national average. Export growth in the North East is up by 2%, albeit below the UK average and historical norm, but this is expected to grow to 3.5% in the year ahead.

The BCM found that profits grew by 4.7% in the 12 months to Q1 2024, the highest of any UK region and higher than the historical norm of 2.9% for the North East. As inflationary pressures are expected to ease and sales increase, firms anticipate profits will increase by 5.9% in the year ahead, above the national average of 5.1%.

Dr James Callaghan, Northern Regional Director, ICAEW, said: “This confidence vote is an encouraging start to the year for firms in the North East, as inflationary pressures begin to ease. Down the track, there should be more good news if domestic and export sales and profitability increase as forecast.

“While concerns surrounding regulatory requirements and an increased tax burden remain, it is encouraging to see other concerns drop in the first quarter of the year. Couple this with a positive outlook for growth and North East businesses have reason to be optimistic.

“Building an economy with resilience at its core, an end to weak productivity and making the UK the best place to run a business, must be among the next government’s top priorities.”