Business confidence in the North East fell 62 points during April to -39 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the North East reported lower confidence in their business prospects month-on-month at -30 per cent when taken alongside their views of the economy overall, this gives a headline confidence reading of -39 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
In an illustration of the impact of COVID-19 on the region’s business, the majority of firms reported a significant decrease in demand for their goods and services, with 63 per cent seeing demand fall in April compared to four per cent who saw it rise.
More than a third (39 per cent) of businesses in the region reported operating at below 50 per cent capacity, while 19 per cent were operating above this level. Around a third (34 per cent) weren’t operating at all.
With 66 per cent of businesses reporting disruption to their supply chain during April, 23 per cent expected the situation to improve within three months, while 11 per cent thought it would take up to 12 months to return to normal levels.
Paul Varley, regional director for the North East at Lloyds Bank Commercial Banking, said: “Firms across the North East are feeling the impact of coronavirus. Falling demand and supply chain disruption is putting significant pressure on their operations.
“We’re working alongside customers to ensure they have the finance needed to weather current challenges, including £2bn of arrangement fee-free finances and capital repayment holidays on loans for those that have been severely affected.”
Across the UK, overall confidence fell 38 points to -32 per cent as firms’ optimism in the economy and confidence in their own prospects dropped sharply. Wales reported the lowest confidence at -52 per cent.
In April, overall business confidence fell across all four sectors. Confidence in the manufacturing sector saw the sharpest decline, falling 46 percentage points to -35 per cent, with the retail sector falling to -33 per cent. The construction sector fell by 34 percentage points to -20 per cent, while services fell 23 points to -22 per cent.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “The results in April demonstrate the full impact of the measures taken by the Government to shut down large parts of the economy to help contain the pandemic, with sentiment now matching the all-time low of December 2008. There are tentative signs that China’s economy is stabilising as it starts to ease lockdown measures, and that may serve as a template for the rest of the world.”