01 Apr East of England business confidence falters but remains in the black
Business confidence in the East of England fell seven points during March to 17%, according to the latest Business Barometer from Lloyds Bank Commercial Banking – conducted between the 1st – 15th March ahead of the Chancellor’s Spring Budget on Wednesday 15th March.
Companies in the East reported lower confidence in their own business prospects month-on-month, down nine points at 19%. When taken alongside their optimism in the economy, down four points to 15%, this gives a headline confidence reading of 17%.
East businesses identified their top target areas for growth in the next six months as evolving their offer (31%), investing in their team (25%) and introducing new technology (13%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 8% of businesses in the region expect to increase staff levels over the next year, down 33 points on last month.
Overall UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year.
On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months, up eight points on last month and 25% said they would increase staff levels by this time next year, up five points month-on-month.
Every UK region and nation had a positive confidence reading in March, with eight out of 11 regions recording a month-on-month increase in confidence. For the second month in a row the West Midlands reported the highest levels of business confidence at 48% (unchanged month-on-month), followed by Scotland (up 24 points), London (up 20 points), and the North East (up two points) all at 38%.
Dene Jones, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Despite the dip in overall confidence, it’s great to see that the region’s business confidence remains strong and that firms are optimistic about their trading prospects.
“We know that many businesses plan to invest in their team as an avenue for growth, and developing much needed skills will create long-term opportunities, as well as bolstering the local talent pool.
“With the end of the financial year approaching, many firms will be assessing their growth plans. We’re committed to remaining by the side of the East’s businesses to support with the advice and funding they need to grow.”
There was a broad rise in business confidence across the sectors, particularly in construction (47% up 28 points) and manufacturing (37% up ten points) both at a ten-month high and retail (32% up 11 points) the highest since February 2022.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms. With hiring intentions improving, we may see employment growth picking up in the coming months. Tentative signs of easing wage pressures suggest that businesses’ difficulties in finding staff may have started to ease.
“Although the measures in the Budget were widely trailed, it is yet to be seen what the full impact of the Chancellor’s announcement, along with the surprise rise in inflation and recent increase in interest rates, will have had on business confidence.”
