Business confidence in the East Midlands has fallen with economic uncertainty and weaker UK demand being seen as the biggest threats to businesses’ fortunes, according to the latest Business in Britain report from Lloyds Bank.
The Business in Britain report, now in its 24th year, gathers the views of more than 1,500 UK companies, predominantly SMEs, and tracks the overall “balance” of opinion on a range of important performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.
The report’s confidence index – an average of respondents’ expected sales, orders and profits over the next six months – has declined by 23 points to 17 percent in the East Midlands since the previous survey in January 2016.
The most commonly identified threat chosen by companies in the East Midlands over the next six months was economic uncertainty, which was cited by 27 percent of firms, closely followed by weaker UK demand, which was mentioned by 16 percent.
This compares with the last Business in Britain survey, which saw weaker UK demand identified by a third (33 percent) as the biggest threat, followed by input costs and employment concerns, which were each highlighted by 14 percent of East Midlands businesses at the start of the year.
The net balance of the East Midlands exporters expecting an increase in total exports across the globe fell by nine points to 21 percent, reflected by decreases in firms’ intentions to export to the Middle East, Asia Pacific and Europe compared with January’s report. However all indicators remained positive.
Exporters’ desire to continue selling to the US and Canada increased slightly by one point, boosted by a larger fall in the value of sterling against the dollar than when compared with the Euro.
Jon Pulford, regional director, SME Banking for the East Midlands, Lloyds Bank Commercial Banking said: “Business confidence in the East Midlands has taken a hit since January but this should be viewed in the context of the recent economic and political shocks, notably the EU referendum vote.
“Despite this, exporting confidence remains high with more regional firms looking to expand into new markets, particularly in Latin American and Africa to drive growth”.