Monday, May 10, 2021

New research reaffirms business confidence surge in the East Midlands

Business confidence in the East Midlands has seen its biggest increase in more than three years after rising by 20 points during April to 40%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East Midlands reported higher confidence in their own business prospects month-on-month, up 16 points at 40% – the highest reading of any UK nation or region.  When taken alongside their optimism in the economy, up 24 points to 39%, this gives a headline confidence reading of 40%.

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

When it comes to jobs, a net balance of 14% of businesses in the region expect to increase staff levels over the next year, down by six points on last month.

Overall UK business confidence surged 14 points in April to 29%, the highest reading since September 2018. The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further restrictions easing in Wales and Scotland. Firms’ confidence in their own business prospects rose by 14 points to 26%, and their optimism in the economy increased by 15 points to 32%.

Most UK regions and nations reported a month-on-month increase in confidence during April, with firms in the South West (up 22 points to 30%), London (up 20 points to 32%), Yorkshire and the Humber (up 20 points to 32%) and East Midlands (20 points to 40%) reporting the largest surges. No nation or region reported a fall in confidence, and none had a net-negative confidence reading for the first time since July 2019.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Business confidence has surged in the region this month – the biggest increase we’ve seen for more than three years. This has, no doubt, been boosted by the return of outdoor hospitality and the opening of non-essential retail, which both play an important part in the region’s economy.

“With firms’ confidence in their own business activity outpacing the rest of the UK, it looks like businesses are gearing up for a year of growth and we’ll be by their side as they bring their ambitions to life.”

Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs. Manufacturing stood out as the most positive sector (40%), likely reflecting strong global demand and notwithstanding ongoing supply chain issues.

Meanwhile, retail confidence jumped to 39%, while construction confidence also increased to 28%. Services confidence rose to 25%, which was also the highest it has been since 2018.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead.

“While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of COVID-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”

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