A new report from Barclays indicates that businesses in the North West are demonstrating resilience despite ongoing challenges related to high costs and economic uncertainty. The Barclays Q1 2026 Business Prosperity Index reveals that 77% of surveyed firms expressed confidence in their business strength over the next 12 months.
Cost and Skills Challenges Persist
However, the index highlights persistent issues. According to the findings, 56% of respondents reported that input costs are negatively impacting long-term growth, while 57% cited labour costs as a hindrance. Additionally, 79% stated that difficulties in finding skilled workers are impeding their growth potential.
Financial Trends Among North West Firms
The index also utilizes anonymized Barclays client data from over 66,000 businesses in the region. Cash inflows from North West SMEs into Barclays Business Banking accounts increased by 0.3%, slightly above the national average rise of 0.2%. In contrast, larger firms with Barclays Corporate Bank experienced an 8% decline in cash flows, which is higher than the national rate of 7%.
North West SMEs have bolstered their savings buffers by 2.6% overall and reduced borrowing by 13.5%, mirroring national trends. Meanwhile, larger corporations continued to increase long-term borrowing at rates above the national average. Barclays interprets this as a sign that investment intentions remain intact.
Expert Commentary
Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, commented: “Businesses across the North West are continuing to operate in a challenging environment, with cost pressures, skills shortages and economic uncertainty all weighing on growth. Despite this, it’s clear that firms are showing resilience and adaptability. Many are taking a disciplined approach to managing costs while continuing to invest in areas that support long-term productivity and competitiveness. The strength of confidence in their own prospects reflects the underlying resilience of businesses across the region, even as the wider economic outlook remains uncertain.”
