East of England firms feeling confident about the future

Business people shaking hands, finishing up a meeting

Business people shaking hands, finishing up a meeting - Credit: Getty Images/iStockphoto

Business confidence in the East of England rose eight points during August to 20%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region reported significantly higher confidence in their own business prospects, which rose 18 points to 27%, although economic optimism fell two points to 13%.

Together, this gives an overall confidence of 20%, which is eight points above last month’s figure of 12%.

Companies’ hiring intentions showed a net balance of 25% of businesses in the region as more businesses expect to hire more staff over the course of the next 12 months - up 10 points on last month.

But across the region, a net balance of 8% 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, up two points on a month ago.

Nationally, overall confidence fell by six points to 23% as firms’ optimism about the economy dropped eight points to 17%. Businesses’ confidence in their own business prospects dropped five points to 29%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

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Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “It’s encouraging to see local businesses feeling more positive this month after overall business confidence took a dip in July.

“With hiring intentions and confidence in firms’ own prospects on the rise, businesses in the East of England are proving to be resilient despite business confidence falling nationally and ongoing uncertainty about the UK’s exit from the EU.”

Businesses in London and the West Midlands showed the most confidence, both at 37%, ahead of the North West (35%).

Those in the South East were the least confident, with an overall confidence of just 8%, 15 points below the national average.

From a sector perspective, firms in the manufacturing sector remained most confident at 38%, but confidence of construction businesses fell sharply by ‑12 points to 36%, closely followed by consumer services (‑6 points to 22%) and other services (‑6 points to 18%).

Senior economist, Lloyds Bank Commercial Banking Hann-Ju Ho commented: “Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.”