Confidence among North West businesses was restored in the final quarter of 2025, according to the latest ICAEW Business Confidence Monitor (BCM) with a confidence score of +12.9 for Q4 2025, after the region slipped to -0.4 in the previous quarter.
However, Lamont Pridmore, a leading Cumbria-based firm of chartered accountants, tax and business advisers, says the positive picture doesn’t reflect the views of local businesses.
The North West continues to outperform the UK average, now at -11.1, and was the only region to record a positive score. It’s also the highest confidence score the region has registered for more than a year.
“It’s good to see business confidence back up again in our region, especially after seeing a drop earlier in the year. It’s a sign that things are moving in the right direction,” said Graham Lamont, Chief Executive at Lamont Pridmore.
“However, our clients are reporting that business is still very challenging with continuing cost pressures a major concern, particularly the impact of the increase in national minimum wage and employers’ national insurance contributions.
The ICAEW reports that North West businesses are increasingly optimistic about the year ahead, with growth projections rising to 5.1 per cent.
Export growth has also risen to 2.8 per cent, which is both higher than the Q3 figure (2 per cent) and above the region’s historical average (2.6 per cent).
However, in tandem with the sentiment across the rest of the UK, businesses in the North West have said the tax burden is their biggest concern.
“It’s no surprise that the tax burden is the most pressing issue and a lot of smaller firms and labour-intensive businesses have been hit hard by the last few Autumn Budgets and Spring Statements.
“Our clients are reporting anxiety and we are working with them to develop appropriate strategies to manage taxation increases and the impact of new or upcoming employment regulations.
“With the Spring Statement due to take place in early March, I hope the Chancellor’s speech will provide further clarity and help settle any remaining concerns,” said Graham.
The BCM reports a broadly strong business performance in the North West.
The above-average sales growth has supported a further increase in profits, with companies reporting a 3.3 per cent rise in the year to Q4 2025, ahead of the regional historical average (2.9 per cent) and the UK average (2.7 per cent).
Businesses expect profits to continue to grow, projecting a 5.4 per cent expansion over the year ahead, one of the strongest forecasts in the UK.
Investment intentions remain positive, with capital expenditure in the region rising to 3.5 per cent in Q4 2025, the fastest rise in the UK.
In slightly less positive news, the North West labour market shows signs of cooling down, with employment growth slowing to 1.1 per cent in Q4 2025, the lowest since Q2 2021 but still above the UK average (0.8 per cent).
“Despite the dip in employment growth, companies are still optimistic about recruitment over the next year, forecasting an employment growth of around two per cent, which is better than the national projections,” said Graham.
Concerns about the availability of management and non-management skills, as well as staff turnover, have also slightly decreased.
“The fact that North West businesses continue to plan and invest in their future is very encouraging,” said Graham.
“Recruitment challenges have eased slightly, but companies still need to carefully manage workforce planning to support growth. The whole team at Lamont Pridmore is working closely with clients to give them the support they need to plan strategically to mitigate ongoing financial pressures.”
Lamont Pridmore continues to support companies across the North West with financial & tax planning, investment strategies and solutions to address business challenges.
For more information about Lamont Pridmore, please contact 0800 2346978.
