Business confidence in the East fell nine points during September to 30%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 23 points at 18%. When taken alongside their optimism in the economy, up seven points to 43%, this gives a headline confidence reading of 30%.
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 fuel disruption and ongoing supply chain issues tightened their grip.
A net balance of 27% of businesses in the region expect to increase staff levels over the next year, up eight points on last month and the highest reading this year.
Overall UK business confidence rose 10 points in September to 46%, with all regions and nations reporting double-digit confidence levels. The number of businesses planning to hire new staff more than doubled from 18% to 37% as firms look to increase headcount over the next 12 months. Overall confidence in trading prospects rose by nine points to 43% and firms’ optimism in the economy increased by the same amount to 48%.
All bar three UK regions reported an increase in confidence with Wales (up 27 points to 46%) and Yorkshire and Humber (up 22 points to 48%) reporting the biggest jumps. Alongside firms in the East of England, those in the North West (down 17 points to 47%) also reported a fall in confidence but remained comfortably in positive territory. Businesses in the South East reported no change month on month at 32%.
Dave Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Despite a slight downturn in early September, business confidence across the region remains high and well above the year-to-date average as firms continue to press on with their growth plans following a healthy summer trading period.
“While there are clear challenges ahead amid the ongoing supply chain and labour shortages, it’s encouraging to see businesses are making plans to create new jobs, something that will ultimately help drive the region’s economic recovery in the long term.”
Confidence increased across the four broad sectors, notably in manufacturing and services. Manufacturing (up nine points to 49%) reached a four-month high, while services gained 11 points to 47%, the highest since early 2017, with particularly strong trading prospects in hospitality and financial & business services. Retail confidence improved by 8 points to a four-month high of 42%, while construction only edged up by 1 point to 41% which was nevertheless a three-year high.
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, said: “The economic growth outlook strengthened in the first part of September following rises in business confidence across nine of the 12 regions and nations.
“There are obvious challenges ahead in terms of labour availability, and the impact this has on the post pandemic recovery. It also remains to be seen how the recent events in the fuel market might impact businesses’ outlook. However we can seek comfort in recent progress across the sectors and of the levels of confidence recorded in manufacturing, hospitality and financial & business services.”
