North West firms ‘remain resilient despite high costs’, Barclays Business Prosperity Index shows

Bank research suggests larger firms still considering investment

North West businesses are staying resilient despite the problems caused by high costs and economic uncertainty, new research from Barclays has shown. Barclays’ Q1 2026 Business Prosperity Index showed 77% of those polled were confident in the strength of their business over the next 12 months.

But costs and skills remain challenges for local firms. Some 56% of those polled said input costs were having a negative impact on long-term growth, with 57% citing labour costs as a drag on growth. And 79% of those polled said difficulties finding skilled workers were hitting their ability to grow.

The index also draws on anonymised Barclays client data from more than 66,000 North West firms. It showed cash inflows from North West SMEs into Barclays Business Banking accounts rose 0.3%, compared to a national average rise of 0.2%. But larger firms with Barclays Corporate Bank saw cash flows fall 8%, above the national rate of 7%.

North West SMEs increased their savings buffers by 2.6% overall and cut their borrowing by 13.5% overall, mirroring the national picture. Meanwhile larger corporates continued to increase their longer-term borrowing at above national average levels, which Barclays said is “suggesting investment intentions may remain intact”.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “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.”