Business confidence in the East Midlands fell four points during January to 33%, according to the latest Business Barometer from Lloyds Bank.
Companies in the East Midlands reported lower confidence in their own business prospects month-on-month, down 13 points to 27%. When taken alongside their optimism in the economy, up three points to 38%, this gives a headline confidence reading of 33%.
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 35% of businesses in the region expect to increase staff levels over the next year, down one point on December’s reading.
Overall UK business confidence remained steady in January, dropping just one point from December’s reading of 40% to 39%. Firms remained positive about their future trading prospects, despite a two-point dip month-on-month to 41%, and were optimistic about the economy overall, reporting a reading of 38%, up one point on December’s result. The net balance of businesses planning to create new jobs in the next twelve months decreased marginally by four points to 29%.
Every UK nation and region maintained a positive overall confidence reading in January, with four reporting a higher reading than last month. Yorkshire and the Humber (up 13 points to 48%), Scotland (up 13 points to 37%), the West Midlands (up nine points to 39%) and the South West (up eight points to 37%) all had stronger confidence readings month-on-month, with Yorkshire and the Humber now the most optimistic region.
Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Despite the small dip, overall business confidence remains steady in the East Midlands and there is much for the region’s firms to be optimistic about. The end of Plan B restrictions should boost consumer confidence and create new opportunities for hospitality and leisure businesses who’ll see more footfall as people return to offices.
“It’s also promising to see hiring intentions remain strong, which will undoubtedly benefit the local economy in the long-term. We will be helping East Midlands businesses to capitalise on the opportunities that come their way as they lay the foundations for future growth.”
Industry sector performance was mixed during January with confidence among manufacturers increasing by three points to 43%, reaching its highest level for three months due to an easing of supply chain pressures. Retail confidence also rose (up one point to 44%) while confidence among firms in IT/communications remains particularly strong at 72%.
The impact of Omicron over the festive period meant the service sector extended its recent run of modest decreases in January, dropping one point to 38%. Positively, hospitality has recovered some of December’s decline, rising from 6% to 38%.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “January’s survey shows a continued resilience with minimal fluctuation as economic optimism remains at a historically strong level.
“A larger decline in confidence was potentially prevented by the reduction in Covid infection rates from early January and the prospects of the easing of restrictions across the UK.
“However, businesses remain cautious about the pandemic and are facing into challenges from rising cost pressures although many are raising their prices in response.”
