That’s according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies across the region registered a confidence figure of 31 per cent in February, a 16 point decline from January’s high of 47 per cent when the region was the second most confident in the UK.
Companies in the North West report lower confidence in their business prospects at 25 per cent and lower economic optimism at 37 per cent.
Firms’ hiring intentions show that a net balance of 27 per cent of businesses in the region expect to hire more staff during the next year, down 19 points from January’s figures.
Nationally, overall confidence fell two points to 33 per cent, driven mainly by a fall in firms’ economic optimism.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Across the region, a net balance of one per cent of businesses say they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down 12 points from January’s figures.
Martyn Kendrick, regional director for the North West at Lloyds Bank Commercial Banking, said: “Although overall confidence across the region is still in line with the national average, it’s concerning to see that it’s fallen so significantly in the past month.
“This may be due to companies becoming more pessimistic about their future business prospects, which could have potentially led to firms scaling back plans to expand their workforce.
“Overall confidence is highest among businesses in London, at 50 per cent, followed by the North East and East Midlands.”