Business confidence grows in East

Business confidence in the East of England is growing but employment rates are softening, according to the latest Quarterly Economic Update from the East of England Development Agency.

Manufacturers are more optimistic than service companies about the next 12 months, the report said, despite tight margins due to strong competition and the rising costs of raw materials.

The balance of service companies in the region expecting increased turnover over the coming year is rising, however the majority continued to complain about recruitment difficulties and rising overheads.

While business confidence had improved, EEDA said that economic activity rates in the region were below both the South East and the South West.

Unemployment rates in the East of England are falling and beginning to edge closer to the national average, according to the figures in the Update. The number of jobless rose from an average of 4% in May to July 2005 to 5% in the same period this year.

However, the decline in manufacturing employment, which was consistent throughout 2005, appeared to have stabilised by June this year.

EEDA chief executive David Marlow, said: “We are undertaking a number of initiatives which will all play their major part in helping alleviate the region's unemployment situation.

“In particular, our Responding to Redundancies programme will help more people get back into work, while the new regional Business Link service - which will launch in April 2007 - will enable businesses to survive, grow and ultimately increase the region's employment base.”

Meanwhile, it was mixed news for the region on the property front, according to the report. House prices continued to rise across much of the East of England, however they have started to cool in Suffolk and Norfolk tempering the house price inflation experienced in this counties throughout most of 2005.

In Suffolk, house prices fell by around 5% in the year to June 2006.