Tuesday, June 2, 2020

Business confidence on the rise in the East Midlands

Business confidence in the East Midlands rose by one point during November to 14%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East Midlands report lower confidence in their business prospects, falling 10 points to 16%, but higher optimism in the economy as a whole at 10%. Together this gives an overall confidence of 14%, the third highest in the UK.

This has had a positive impact on businesses’ hiring intentions, with a net balance of 8% of firms in the region expecting to hire more staff during the next year, up 14 points on last month.

Across the UK, overall confidence rose three points to 9% as firms’ optimism about the economy rose 10 points to 7%, although their confidence in their own prospects dropped three points to 12%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence on the rise here in the East Midlands, with firms continuing to demonstrate ambitions for growth.

“The fact that businesses are aiming to grow their headcounts suggests they are already readying themselves for upcoming opportunities and investing in growth, which will help boost the local economy.

“As they do, we will continue to be by their side. We pledged to lend £1.2 billion to businesses in the East Midlands throughout 2019 and will continue to offer our support into the new year to help make this growth possible.”

Across the region, a net balance of 14% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up 14 points on a month ago.

Regional picture

Businesses in the West Midlands once again showed the most confidence, at 24%, ahead of London at 20%, and East Midlands at 14%.

Those in Scotland were the least confident, with an overall confidence of -6%, 15 points below the national average.

National overview

Overall business confidence improved in manufacturing, retail and services and stayed broadly steady in construction. The largest increase was in the retail sector, rising six points to 21%, while the construction sector remained high at 16% despite a slight decline of two points.

Sentiment in the manufacturing sector rose to a four-month high of 10%, while services confidence also increased for a second month, by four points to 4%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The third consecutive increase in overall business confidence is positive for the UK as economic optimism reaches the highest level since January.

“While concerns about the impact of the UK leaving the EU continued to ease slightly, hiring intentions remain broadly stable and it will be interesting to see how this trend continues towards the end of 2019 and into the start of next year.”

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