Business confidence in the East Midlands fell two points during October to 13%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East Midlands report higher confidence in their business prospects at 26% and lower economic optimism at 1%. Together, this gives an overall confidence reading of 13%.
Despite this, businesses’ hiring intentions have dropped sharply. A net balance of -6% of businesses in the region expect to hire more staff during the next year, down 32 points on last month.
Across the UK, overall confidence rose four points to 6% as firms’ confidence in their own prospects climbed two points to 15%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before the government announced its new deal on the UK’s departure from the EU.
Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Although business confidence has fallen slightly this month, the East Midlands remains more upbeat than most other parts of the country and, as such, we’re encouraged by businesses’ resilience in the face of some economic uncertainty.
“Firms are generally more optimistic about their own prospects than they were last month, and we’d expect this to increase as the economic outlook becomes clearer.
“Whatever the coming months may hold, we’ll continue to be by their side, and have pledged £1.2 billion to support them throughout 2019.”
Across the region, businesses said they felt that the UK’s exit from the European Union was having a neutral impact on their business, up from September when a net balance of 25% thought it was having a negative impact.
Businesses in the West Midlands showed the most confidence, at 16%, ahead of the South West at 15%, and East Midlands (13%).
Those in Scotland were the least confident, with an overall confidence of -3%, nine points below the national average.
Meanwhile, overall business confidence improved in all four broad sectors, with the largest increases being in the construction sector, which rose eight points to 18% and the manufacturing sector, which increased seven points to 5%. Despite confidence in the services sector rising for the first time since June, by three points to 0%, overall confidence remained the weakest in this sector, while confidence in the retail sector saw a small increase of one point to 15%.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Both business confidence and optimism about the wider economy have picked up this month, with economic optimism reaching a three month high as concerns about the impact of the UK leaving the EU eased. However, there was a slight step down in hiring intentions, which could reflect concerns about ongoing economic uncertainty.”