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Growth in sales and profits is driving business optimism in the North West

Business confidence in the North West has remained positive for the third quarter, +7.4, according to the latest ICAEW Business Confidence Monitor™ (BCM). This positive confidence is largely down to a combination of positive sales growth and faster increases in selling prices, which are both boosting profits.

Market conditions

  • Domestic sales growth is up from 3.9% a year ago to a strong 4.5% in the current quarter in comparison to a slow down across the UK
  • Selling prices are has increased by 1.9% in the year to Q3 2018, compared with the UK average of 1.6%
  • Companies in the North West are increasing their capital investment and Research & Development spending by only 2.1% in both cases

Outlook for 2018

  • Capital investment is projected to see the fastest increases over the coming 12 months, at 2.7%
  • Businesses anticipate stronger growth in domestic sales (up 4.8%), alongside a rise in exports of 3.3%

Melanie Christie, ICAEW North West Director said:

“Although business confidence is down from the previous quarter, at +7.4, it remains higher than the UK average. It is likely that the driving force behind the positive business confidence is a combination of positive sales growth and faster increases in selling prices, which are both boosting profits.

“With business confidence remaining positive, businesses are planning to invest more throughout the rest of 2018 and on into 2019. Businesses have growing confidence about profits as well, which are forecast to increase. There are a lot of reasons for companies to be cautious going forward, but if forecasts continue as planned, then the North West should continue to see increased confidence going forward."