Business confidence in the East of England rose 17 points during June to 31%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East reported higher confidence in their own business prospects month-on-month, up 22 points at 37%. When taken alongside their optimism in the economy, up 13 points to 25%, this gives a headline confidence reading of 31%.
Looking ahead to the next six month, businesses in the East of England identified a range of growth opportunities, including diversifying into new markets (41%), evolving their offering (30%) and introducing new technology (27%).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 26% of businesses in the region expect to increase staff levels over the next year, up 13 points on last month.
Overall UK business confidence fell 10 points during June to 28%. Firms’ optimism in the economy dropped 12 points to 21%, while their outlook on their future trading prospects was down eight points, at 34%. The net balance of businesses planning to create new jobs also decreased, by nine points to 28%.
Every UK region and nation reported positive confidence readings in June. However, the East of England was the only region to record a higher reading than the previous month. London (down 28 points to 35%), the West Midlands (down 23 points to 30%) and Scotland (down 15 points to 27%) reported the largest decreases month-on-month, with the North West (down two points to 42%) now the most optimistic region overall.
Dene Jones, regional director for the East of England at Lloyds Bank Commercial Banking, said: “The rebound in confidence we’ve seen this month is testament to the ability to pursue growth despite current headwinds. While increasing energy prices may have caused discomfort for many firms, sustainable energy looks set to be the source of growth for the region’s economy.
“Further progress on investment for Suffolk’s Sizewell C in the coming weeks, alongside proposals for the East to become a hub for hydrogen technology, puts businesses at the heart of new opportunity to drive a greener economy. Ensuring strong cash flow and investing in talent means firms can be proactive about capitalising on growth, and we’ll continue to be by their side to help the region prosper.”
Trevor Bissett, managing director of Caps Cases, a packaging manufacturer based in Newmarket, said: “There’s no shying away from it – it’s been a tough first six months of the year. But many businesses in the region – including ourselves – are becoming more pragmatic. The challenges that we’re all facing are out of our hands, so instead we’re focusing on the aspects we can control in order to put our best foot forward.
“Largely, this is looking at how we can add value and invest in relationships with our customers, making sure that we fully understand the issues they’re facing and how we can best help them overcome these. This sort of agility to adapt operations and support customers in new ways is likely what’s helping firms in the East to become more confident.”
Confidence among businesses in the manufacturing and construction sectors fell, bringing them close to the UK all-sector average, at 32% and 30% respectively, reflecting lower optimism in the economy. Service sector confidence declined to its lowest in a year, at 25%, showing weaknesses in hospitality, though offset by stronger confidence in business services. Confidence in retail businesses edged up this month four points from 27% to 31%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence declined this month, suggesting that the momentum for growth is moderating. Firms remain broadly positive but face several challenges ahead, including concerns around higher costs and slowing demand. If these trends continue, businesses may have less scope to pass on higher costs to support their margins.”
