Political and economic uncertainty takes its toll on region’s firms as hiring plans slow

The recruitment plans of East Midlands firms have slowed as businesses across the region reported a dip in confidence in August against a backdrop of ongoing political and economic uncertainty.

Business confidence in the East Midlands dropped 12 points during August to 21%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region also reported lower confidence in their own business prospects, at 22%, and lower economic optimism, at 20%.

Together, this gives an overall confidence of 21%, which is 12 points below last month’s figure of 33%.

Firms’ hiring intentions showed a net balance of 11% of businesses in the region expect to hire more staff during the next year, down 13 points on last month.

The region is increasingly split on the impact of Brexit, with a net balance of one per cent of businesses stating that they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity. This compares with July when 15% expected Brexit would have a positive impact.

Nationally, overall confidence fell six points to 23% as firms’ optimism about the economy dropped eight points to 17%.

Firms’ confidence in their own business prospects dropped five points to 29%.

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

Glen Wilson, regional director for East Midlands at Lloyds Bank Commercial Banking, said: “It seems that ongoing political and economic uncertainty is continuing to take its toll on East Midlands firms, and this has had an impact on their hiring intentions.

“Many local businesses are – very sensibly – are revisiting their business plans and assessing their working capital to help them to continue to prosper amid periods of uncertainty, which should help to bolster their resilience in the medium term.”