Business confidence in the East of England fell by 28 points during December to 20%, according to the latest Business Barometer from Lloyds.

Companies in the East reported lower confidence in their own business prospects month-on-month, down 55 points at 17%. When taken alongside their optimism in the economy, down three points at 22%, this gives a headline confidence reading of 20% (vs 48% in November).

Looking ahead to the next six months, businesses in the region identified their top target areas for growth as evolving their offering, for example by introducing new products or services (41%), investing in their team, for instance through training (37%) and introducing new technology, such as AI or automation (35%).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall UK business confidence fell two points in December to 39%, although remained above the long-term average of 29%.

While firms’ confidence in the wider economy strengthened five points to 31%, their confidence in their own trading prospects fell eight points to 47%.

London was the most confident UK nation or region in November (53%) for a second month in a row, followed by the North West (50%).

Sector Insights

Although confidence fell in the service sector, this was partly offset by rises in manufacturing and retail, with these sectors swapping places in December.

Services fell from 46% to 35% in December – a fall of 11 points. In contrast, manufacturing and retail increased 10 points to 42% and 43% respectively, thereby taking manufacturing and retail above services for the first time in 4 months. Trading prospects for retail rose for the first time in three months, while construction confidence was steady at 41%, equalling last month’s result.

Kirsty Sadler, regional director for the East of England at Lloyds, said: “While confidence has fallen this month, we know businesses in the East are focused on preparing for the year to come, and building the strongest possible foundations for fresh growth.

“As we enter 2025, we will continue to be by the side of our region’s businesses, offering bespoke and on-the-ground support to help them navigate whatever lies ahead.”

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: “In the last few months overall confidence has fallen incrementally, and in December the trend continued as it fell by 2 points to 39%. While there hasn’t been any significant one-month change, confidence has gradually drifted from the summer’s highs.

“The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects which have proven to be resilient over the last quarter. There was, however, more positivity regarding the wider economy and, going into 2025, this offers some hope if companies continue to feel confident about the economy.

“Elsewhere, although confidence fell in the services sector, this was partly offset by improvements in manufacturing and retail – which could be a significant for this time of year.”