Business confidence in the East Midlands rose 13 points during June to -29%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East Midlands reported higher confidence in their business prospects month-on-month at -24%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -29%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When asked about the impact of Coronavirus on their business, more than two-fifths (43%) said they expect to be operating at more than 50% of capacity by the end of June, while 14% didn’t expect to be operating at all by the same point. One quarter (25%) said it would take three months until they were back to operating at pre-COVID-19 levels, although 10% expect it to take more than 12 months.
The majority of firms continued to see demand negatively affected during June, with the picture worsening month-on-month. 77% experienced a fall in demand for their products and services, compared to 66% May. Meanwhile, 7% experienced an increase in demand, up two points on the month before.
Of the 73% of businesses reporting disruption to their supply chain during May, 27% expected the situation to improve within six months, while just 1% expected it would take more than 12 months to return to normal levels.
Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “While still in the red, it’s encouraging to see confidence rise this month for the first time since January this year.
“Looking ahead, the opening of the retail sector will provide a much-needed boost to a number of businesses in the region, and the expected reopening of hospitality venues will be another important step towards recovery. We’re ready to help businesses in the East Midlands as they plan for a more positive future.”
Across the UK, business confidence grew marginally month-on-month, rising three points to -30%. The West Midlands was the least pessimistic region at -18%, followed jointly by Yorkshire & the Humber and the North East at -23%. Scotland was the most pessimistic, with confidence dropping eight points month-on-month to -41%.
In June, the construction sector rebounded strongly, increasing 30 percentage points to -14%. The retail sector increased two points to -23% and manufacturing saw an improvement at -35%. These were the highest levels seen since March, however, other services fell to -36% largely reflecting the impact on the hospitality and education sectors.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “While the results suggest the economy may be starting to see some improvement, trading conditions remain difficult for most firms as the majority are still experiencing disruption to supply chains. Hopefully the recent Government announcement of further relaxation of restrictions and the slight easing of social distancing measures will enable more businesses to reach their capacity and resume their usual activities, which we would expect to be reflected in further improvements to optimism next month.”