30 Sep Overall confidence of firms in the East of England rose 17 points in the past month to -5%
Business confidence in the East of England rose 17 points during September to -5%, the largest month-on-month increase of all UK regions, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East of England reported higher confidence in their own business prospects month-on-month at -4%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -5%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When asked about the impact COVID-19 was having on their business, the majority of firms continued to see demand negatively affected by coronavirus during September, but with the picture improving month-on-month. 60% experienced a fall in demand for their products and services, down eight points on the month before. Meanwhile, 11% experienced an increase in demand, up seven points on August.
The September data suggests that many businesses expect to make redundancies following the end of the furlough scheme next month. When asked about job retention among firms with furloughed staff, only 37% expect to bring back more than 90% of their employees.
However, almost half (44%) of East England firms aren’t currently using the Job Retention Scheme (vs. the UK average of 38%).
When asked about the impact of social distancing measures, 56% of businesses said they could, in theory, operate at full capacity while remaining COVID-secure, although 32% said they couldn’t operate fully within the rules.
Of the 42% of businesses reporting disruption to their supply chain during September, 27% expect the situation to improve within six months, while 6% expect it will take more than 12 months to return to normal levels.
David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Firms in the East of England have been hit hard by the coronavirus crisis but it’s encouraging that business confidence saw such a jump in September. The data indicates that more firms have started to see an uplift in demand, and most businesses are confident they can successfully operate while remaining COVID-secure.
“However, a difficult few months lie ahead with new restrictions for firms to navigate. We’ll continue to be by the side of businesses across the East as they look to overcome these challenges.”
At national level, overall confidence increased three points month-on-month to -11%. The East Midlands, Wales and London each had the highest confidence at -4%. Meanwhile, optimism fell nine points month-on-month in the South West to -34%, making it the least confident UK region.
Of the four major industry sectors, the services sector recorded the highest increase of eight points to -10%, driven in particular by the hospitality and finance & business services. Manufacturing was the only major sector to experience a decline in confidence, falling by eleven points to -18%.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It is encouraging to see a fourth consecutive lift in confidence, reflecting improvements in trading prospects and economic optimism. However, with new lockdown restrictions being announced, the UK’s path to economic recovery is uncertain and it remains to be seen how the new measures will impact on business confidence.”