Business confidence in economy falls across East of England - survey

The construction sector was most confident in its prospects at a net 22% (down seven points), accor

The construction sector was most confident in its prospects at a net 22% (down seven points), according to the Lloyds business barometer Picture: LUCY TAYLOR

East of England firms’ confidence in the economy has fallen into negative territory, according to a banking barometer.

A net balance of -6% of the region’s firms are now pessimistic about the economy - although confidence in their own businesses remains intact at +27%, up one point since November, according to Lloyds Bank’s Business Barometer for December.

The monthly barometer tracks the overall ‘balance’ of business confidence opinion by weighing up the percentage of firms that are positive in outlook against those that are negative, broken down into views about the economy, recruitment, and their own business prospects. Responses are weighted to reflect the composition of the economy.

Companies’ hiring intentions showed that a net balance of 8% of businesses in the region expect to hire more staff during the next year, down six points on last month.

Across the UK, overall confidence fell seven points to 17% as firms’ optimism about the economy dropped 10 points to 7%. Companies’ confidence in their own business prospects slipped five points to 26%.

Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Business confidence across the region has slid backwards in December, driven by economic pessimism amid a backdrop of ongoing uncertainty.

“But it’s heartening to see that regional firms still have confidence in their own business prospects and are making headway with their growth ambitions as they enter the new year.”

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Across the region, a net balance of 18% 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 16 points on a month ago.

Across the regions, businesses in London showed the most confidence, at 32%, ahead of the West Midlands (27%) and Wales (20%).

Those in Scotland were the least confident, with an overall confidence of minus 9%, 26 points below the national average.

Overall business confidence fell across all industry sectors. Businesses in the manufacturing and construction sectors were most confident in their prospects at a net 23% (down nine points) and 22% (down seven points), respectively.

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