Business confidence in the East of England slides
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Business confidence for companies in the East of England fell to its lowest level in more than a year in January, as wrangling over Brexit continues with no clear end in sight.
Lloyds Bank’s Business Barometer for January 2019 shows overall confidence for firms in the East of England fell four points in the past month to 6%, the lowest since the regional Business Barometer report launched a year ago, as companies reported a dip in confidence about their business prospects, down 10 points to 17%.
But surprisingly, East of England firms’ pessimism about the economy lessened slightly, from 6% to 4%.
Businesses’ hiring intentions showed that a net balance of 8% of firms in the region now expect to reduce their headcount during the next year. At the end of last year, a similar proportion (8%) expected to create new jobs.
This comes despite overall confidence across the UK rising two points to 19%, as firms’ optimism about the economy climbed three points to 10%. Companies’ confidence in their own prospects edged up one point to 27%.
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The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Firms across the region have started off the year on a cautious footing with hiring intentions, confidence in business prospects and optimism about the wider economy all falling.
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“There’s no doubt that companies across the UK are navigating uncertain times, which makes planning ahead hard. Firms in the East of England have proven their resilience time and time again and we’re committed to be by the side of businesses whatever the year ahead may bring. That’s why we’ve pledged to lend up to £1.7bn to East of England businesses during 2019.”
But Brexit appears to be weighing slightly less heavily on people’s minds, as across the region, a net balance of 13% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, compared with 18% a month ago.
The construction and manufacturing sectors had both the highest confidence (30% and 28% respectively) and the strongest hiring intentions (26% and 30% respectively).
Meanwhile, the retail (14%) and services sectors (19%) had both the lowest confidence as well as the weakest hiring intentions (9%) and 8% respectively).
These pictures were also reflected in the sectors’ views about the impact of Brexit. Net balances of 15% (services) and 13% (retail) expected the UK’s exit from the EU to have a negative impact, compared with just three per cent in manufacturing. A net balance of nine per cent of construction firms expect it to have a positive impact.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Despite businesses ending 2018 on a low, it’s good to see that, across the UK as a whole, they’ve started the year on a slightly more positive footing.
“The results for the manufacturing and construction sectors are particularly encouraging and we hope the picture will improve further as we move into February and beyond, if geopolitical uncertainties subside.”