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Business confidence in the East of England dropped 11 points but remains in positive territory at 25%

02 Aug Business confidence in the East of England dropped 11 points but remains in positive territory at 25%

Business confidence in the East fell 11 points in July to 25%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East reported lower confidence in their own business prospects month-on-month, down six points at 32%. When taken alongside their optimism in the economy, down 16 points to 17%, this gives a headline confidence reading of 25%.

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

A net balance of 4% of businesses in the region expect to increase staff levels over the next year, down 17 points on last month – the biggest drop of any region or nation.

Overall UK business confidence dipped three points to 30% in July but remains well above the year-to-date average of 19%. Businesses in the North East (40%), East Midlands (38%) and North West (38%) were the most optimistic overall.

In July, four regions reported an increase in confidence: the North East (up 13 points to 40%), North West (up nine points to 38%), East Midlands (up seven points to 38%) and West Midlands (up one point to 30%), while the remainder reported a drop.

Scotland (down 14 points to 28%), East of England (down 11 points to 25%) and Wales (down nine points to 12%) reported the biggest falls in confidence but all retained an overall positive reading.

The overall number of UK firms expecting planning to create new jobs in the next twelve months rose one point to 18% in July, the highest reading since November 2018 and the sixth consecutive month that employment expectations have risen.

Dave Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Business confidence in the East remains firmly in positive territory, despite the dip from June’s record highs.

“With restrictions now lifted across England, and the great weather encouraging footfall and consumer spending, we’re hearing more and more that firms are now slowly but surely getting back to business as usual.

“Whatever the coming weeks and months ahead bring, we’ll be working with firms across the region to help them emerge from the pandemic in as strong a position as possible.”

Confidence fell slightly in the broad economic sectors in line with the overall economic picture. Manufacturing and retail confidence declined for a second month from previously elevated levels. Nevertheless, at 33% (down from 35%) for manufacturing and 32% (down from 36%) for retail, confidence remains at historically strong levels. Construction and services sector confidence also dipped to 33% (from 35%) and 28% (from 31%), respectively.

In the subsectors, confidence was particularly strong in hospitality (63%, up from 38%), and transport (53%, up from 37%), reflecting the further opening of the economy, as well as in business services & finance. Employment and pay growth expectations were also especially strong in these subsectors as well as in construction.