Jobs on the line as confidence plummets among region’s firms
- Credit: James Bass
Businesses’ confidence in the East of England plummeted by 11% between December and January as optimism about their own prospects took a battering, a survey shows.
Lloyds Bank’s Business Barometer for January 2021 recorded falls in optimism across seven of 11 UK regions — including the east, which dropped to -12% overall.
The region’s companies were much less confident month-on-month about their own business’s outlook, crashing by 22 points to -10%.
Meanwhile, their views of the economy as whole fell one point to -14%. Overall, that gave a reading of -12%.
Worryingly, a net balance of 10% of regional firms expect to shed jobs over the next year — up 10 points on December.
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The barometer balances positive and negative readings from 1,200 firms across the UK, including 94 in the East of England, with a zero reading suggesting that both are evenly matched.
But across the UK, 48% of firms are confident that the rollout of the coronavirus vaccination roll-out will help their trading prospects in 2021.
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At the same time, 61% of firms said current restrictions had caused their turnovers to fall with just 14% expected trading levels to return to pre-pandemic levels in the next 12 months.
When it comes to jobs, a net balance of 10% of businesses in the region expect to reduce staff levels over the next year, up 10 points on last month.
Their economic optimism fell dramatically by 34% to stand at -10%. Overall business confidence dipped three points to -7% as the third lockdown came into force.
The biggest falls were reported in Scotland (-32% vs -9% in December), Wales (-20% vs -1% in December) and the South West (-8% vs 5% in December). But firms reported a month-on-month increase in confidence in London (up 5% to 3%), the South East (up 7% to -4%) and North West (up 8% to -5%). Yorkshire business confidence remained steady month-on-month at -4%.
Dave Atkinson, regional director for East of England at Lloyds Bank Commercial Banking, said: “Even prior to the latest national lockdown, strict restrictions had been in force in large swathes of our region affecting business confidence.
"However, with a vaccine now being deployed, businesses appear hopeful for their prospects in the year ahead.”
The bank’s senior economist Hann-Ju Ho said: “It has been a challenging start to the New Year for UK businesses adapting to a third national lockdown alongside the new European Union (EU) trade arrangement taking effect.
“Nevertheless, while confidence remains below average, it is encouraging that business sentiment is still the second highest since the low of May 2020.
"Overall, the vaccine rollout programme has lifted confidence and that will hopefully buoy business optimism in the coming months.”