Business confidence in the East of England fell one point during September to 1%, according to the latest Business Barometer from Lloyds Bank Commercial Banking – conducted between 1st-15th September, before the Chancellor’s mini-budget on Friday 23rd September.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 12 points at 4%. When taken alongside their optimism in the economy, up 10 points to -1%, this gives a headline confidence reading of 1%.
East of England businesses identified their top target areas for growth in the next six months as diversifying into new markets (35%), investing in their teams (27%) and evolving their offering (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 5% of businesses in the region expect to increase staff levels over the next year, up six points on last month.
Overall UK business confidence stayed the same as in August during September at 16%. Despite the net balance of businesses planning to create new jobs increasing by one point to 17%, firms’ outlook on their future trading prospects dropped one point to 25%, and their optimism in the wider economy also fell by one point to 5%.
Three UK regions and nations recorded a month-on-month increase in optimism in September. London (up 12 points to 33%), the South East (up 15 points to 15%) and Scotland (up 10 points to 15%) all reported higher confidence readings with London now the most optimistic region overall. Only Wales (down five points to -4%) recorded a negative overall confidence reading in the last month.
Dene Jones, regional director for the East of England at Lloyds Bank Commercial Banking, said: ”After a turbulent summer for businesses here in the East, largely caused by ongoing rising inflation and supply chain disruption, it’s encouraging to see the ship steadied somewhat in September.
“While wider economic uncertainty can be challenging for businesses to manage, those that continue to keep a close eye on their cash flow will be best placed to help mitigate the road ahead and be able to capitalise on any growth opportunities that come their way.”
Business confidence rose by two points in both the retail and service sectors (15% and 17% respectively), however both these figures are close to 12-month lows. Manufacturing and construction firms saw their lowest levels of business confidence this year, down two points in manufacturing to 14% and down 16 points to 10% in construction. This was driven by overall falling optimism in the economy.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “It is encouraging to see business confidence stabilising after a three-month decline. Firms’ assessment of their own trading prospects also remained steady and continues to show some resilience during turbulent times. Yet, cost pressures remain, as more businesses look to raise prices to help protect their margins while wage pressures show little sign of abating at this stage. With the recent volatility in financial markets as well as the Government’s Growth Plan and energy cap announcements, it will be interesting to see how these measures affect business confidence.”
