Confidence rises among East of England firms but remains in the red

Business confidence in the East of England rose four points during February to -8%, 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, up five points at -5% when taken alongside their views of the economy, up three points to -11%, this gives a headline confidence reading of -8%.

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

When it comes to jobs, a net balance of 4% of businesses in the region expect to reduce staff levels over the next year, down six points on last month.

Across the UK, overall business confidence rose in February as the government announced it would be creating a ‘roadmap’ out of lockdown. Confidence increased by nine points to 2%, the first net positive reading since March 2020. Firms’ economic optimism also jumped 12 points month-on-month to 2%.

All UK nations and regions saw a month-on-month increase in confidence in February, with the biggest increases in the North West (13% vs -5% in January), the East Midlands (10% vs -8% in January), Wales (-5% vs -20% in January) and Scotland (-17% vs -32% in January). Despite this, four remained in net negative territory with Wales (-5%), the South West (-6%), the East of England (-8%), and Scotland (-17%) all in the red.

Dave Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “The East has been severely hit by new Covid-19 variants so it’s unsurprising to see business confidence here is subdued in comparison with other regions. That said, overall confidence, economic optimism and the outlook on jobs have all shown encouraging growth this month.

“Firms in the region have a keen eye on the roll-out of the Covid-19 vaccination programme and what this could mean for a viable lockdown exit strategy. They will likely have been buoyed further by the Prime Minister’s announcement earlier this week. Whatever the coming weeks and months may bring, we’ll remain by the side of businesses in the East of England as they look to navigate the road ahead.”

Confidence increased across all four broad industry sectors to the highest levels since March 2020. After a soft start to the year, manufacturing jumped by fourteen points to 5%, while construction rose eight points to 7%. Confidence in retail extended nine points to 3%, while services advanced by ten points to 1%, led by broad-based improvements in the subsectors.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “The uplift in business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival in the future and the continued success of the vaccine rollout.

“In the coming weeks, announcements in the Budget and prospects of an easing of lockdown restrictions will hopefully help to bolster the recovery in business confidence as the economy starts to reopen.”

To find out more visit the Lloyds Bank Commercial Banking website