Reeling East of England firms look to shed staff amid pandemic fallout

Business confidence is lower in the East of England than in other regions of the UK, but it is impro

Business confidence is lower in the East of England than in other regions of the UK, but it is improving Picture: MONKEYBUSINESSIMAGES - Credit: Getty Images/iStockphoto

Confidence among businesses in the East of England is rising - but it’s still very shaky, according to a poll of regional companies.

Lloyds Bank’s Business Barometer for July 2020 shows sentiment remains firmly in negative territory at –31% compared with –45% in June, with firms looking to cut staff.

The barometer questions 1,200 firms nationally to give a balance of opinion by comparing positive responses against negative ones to come up with a percentage in either direction.

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But with the effects of the coronavirus crisis continuing to be felt strongly, more than a quarter of companies (26%) say they still can’t operate fully, despite some relaxation of rules imposed during the coronavirus crisis.

And despite the 12-point uplift in sentiment, three quarters of firms have seen a fall in demand for their products and services – up four points on June.

At the same time, just 6% saw a rise in demand – up three points on the previous month.

Across the region, a 41% minority said they weren’t currently using the Job Retention Scheme.

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But worryingly, of the companies with furloughed staff, just 24% expected to keep 90% or more of their employees.

More than half of companies – 57% - reported disruption to their supply chain in July but 53% of these expected the situation to improve over the next year. Just 5% felt take longer to return to normal.

A further 61% said they could in theory operate at full capacity while remaining Covid-secure while 26% said they couldn’t operate a capacity while remaining within the rules.

David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Businesses in the region have had a much-needed boost in July, no doubt helped by retail, hospitality and tourism sectors restarting their operations.

“But despite positive signs and lockdown continuing to ease, lingering supply chain disruption and weakened demand are just two of many key challenges that companies in the East continue to face.

“We will continue to stand by the side of local businesses to provide the support they need to plan for recovery.”

Nationally, UK business confidence rose eight points to -22% during July, with the North East the most confident region at -3% followed by the West Midlands (-7%) and the North West (-15%). Wales and Scotland were the least confident with -31% and -37% respectively.

Construction was the most gloomy sector, falling eight points to –22%.The retail sector increased 11 points to -12%, manufacturing increased 14 points to -21% and services rose 10 points to -26%.