Business confidence in the East Midlands remained stable at 35% during April, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East Midlands reported slightly lower confidence in their own business prospects month-on-month, down three points at 34%. When taken alongside their optimism in the economy, up three points to 36%, this gives a headline confidence reading of 35% (the same reading as in March).
Businesses in the East Midlands identified their top target areas for growth in the next six months as investing in their team, including hiring new staff and investing in training (37%), evolving their offering with new products or services (37%) and introducing new technology (32%).
A net balance of 49% of businesses in the region also expect to increase staff levels over the next year, up 22 points on last month.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall UK business confidence held steady at 42% in April, the same level as recorded in March and February.
While firms’ confidence in their own prospects dipped marginally by four points to 45%, their confidence in the economy rose by four points to 39%. Meanwhile, the net balance of companies planning to increase staff levels over the coming 12 months climbed six points to 33%.
The East of England was the most confident UK nation or region in April (56%), followed by Wales (51%) and the North East (46%).
Sector insights
Businesses in the manufacturing sector reported increased confidence this month, recording an increased score of 45% (up four points) which is the highest level for three months. Similarly, confidence among firms in the services sector (42%) and construction (41%) also improved, largely driven by greater economic optimism.
In retail, confidence pulled back slightly from last month’s strong showing to 40%, illustrating that confidence in this sector remains fragile. Retail is also more liable to be impacted by external factors other sectors do not face into, such as the poor weather.
Dave Atkinson, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Although confidence remained flat this month, East Midlands businesses are still demonstrating positivity, with more firms looking to increase staff levels alongside active plans to grow their offerings to staff.
“We know from our conversations with local businesses that the ambition and drive is there to carve out new routes to growth, and the region’s £1.4bn devolution deal, which will see the appointment of the first ever mayor for the East Midlands Combined County Authority, will only create more exciting expansion opportunities.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “We are beginning to see a consistent trend emerge from our Barometer results in recent months. Businesses are feeling increasingly confident about the economy, coinciding with falling inflation and hopes that interest rates will start to fall this year.
“There continues to be a mixed picture among the regions, with the biggest rises seen in Wales and the South West. The strongest confidence was reported in the East of England, with confidence rising for the third consecutive month. Confidence in the North East eased slightly but remained strong in April.
“The second quarter of 2024 has started brightly for businesses, and we are seeing firms expressing greater confidence in an enduring economic recovery.”
