Confidence among North West businesses has deteriorated slightly but remains higher than most other parts of the UK, according to Lamont Pridmore, a Cumbria-based firm of chartered accountants.
The latest ICAEW Business Confidence Monitor (BCM) shows sentiment in the region has dipped into negative territory at -0.4 after rising to +0.2 in Q2 2025 for the first time since early 2024.
However, the region continues to outperform the UK average of -7.3 and stands as one of the least pessimistic parts of the country. The only area currently ranking above the North West is Wales.
“Business confidence has fallen slightly from what was reported back in July,” said Graham Lamont, Chief Executive at Lamont Pridmore.
“The survey reveals the North West is still holding up better than most areas and local businesses are resilient. Business owners are busy, they’re hiring and many of them planning for growth over the next 12 months.
“However, our clients are reporting increasing levels of concern and nervousness for the future,” said Graham.
The region posted the strongest domestic sales growth in the UK, rising 3.9 per cent over the past year, with firms expecting an even stronger 4.9 per cent increase in the year ahead.
Export growth has declined slightly since July to a modest two per cent. However, businesses in the region are forecasting an uplift to 6.1 per cent, which is the highest expectations of any UK region.
Despite an improving sales environment, cost pressures remain a major concern.
A record 60 per cent (up from 49 per cent in July) identified the tax burden as their most pressing challenge, especially the increase in employers’ National Insurance in April.
Regulatory complexity is also intensifying, particularly in transport and retail.
“The tax burden has hit smaller firms and labour-intensive businesses the hardest,” he added.
“With the November Budget now only a few weeks away, but still so much unknown, there’s increasing anxiety about what might come next.”
Fortunately, business performance appears to be broadly strong across the North West. A slowdown in input cost inflation to 3.3 per cent has contributed to profit growth outpacing the national average (2.3 per cent) at 3.2 per cent.
Investment intentions remain positive, with companies planning above-average increases in both capital expenditure and R&D budgets over the next 12 months.
The North West is one of the UK’s leading regions for expected employment growth, with companies anticipating a 1.8 per cent rise over the next year.
However, salary inflation is expected to stay above historical norm levels for the North West and it is predicted to drop from the current 3.2% to 3.0% over the next year, this is higher than the UK wide expectation of 2.7%.
Recruitment remains active right across the region despite financial pressures, but there are challenges for businesses to source the staff they need.
“The fact that North West businesses are continuing to invest in their future is a very good sign,” said Graham.
“Unfortunately, a growing number of businesses are telling us they’re finding it harder to recruit for managerial and non-management roles and that is slowing down growth plans for some.
“Things are clearly still challenging, but the overall sentiment seems to show that business owners continue to be resilient after years of unpredictability. Their strategy seems to be to continue to plan and invest as a strategy to secure the future of their business and workforce,” Graham explained.
Lamont Pridmore is supporting companies across the region with financial planning, investment and strategies to address business pressures.
For more information about Lamont Pridmore, please contact 0800 2346978 or visit www.lamontpridmore.co.uk.
