Latest lockdown hits East Mids business confidence

Business confidence in the East Midlands fell three points during January to -8%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East Midlands reported higher confidence in their own business prospects month-on-month, up three points to -9%. However, when taken alongside their views of the economy, down nine points to -6%, 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.

Three fifths (60%) of firms said current Covid-19 restrictions had caused a fall in turnover, but they expected the effects of the vaccine programme to boost trading prospects for 2021, with 53% saying the rollout had made them feel more confident about the year ahead. However, only 16% expect trading levels to return to pre-pandemic levels in the next twelve months.

When it comes to jobs, a net balance of -3% of businesses in the region expect to reduce staff levels over the next year, down seven points on last month.

Nationally, overall business confidence dipped in January as the third lockdown came into force, falling by three points to -7%. Firms’ economic optimism dropped dramatically month-on-month, decreasing by 34 points to -10%.

Almost all UK nations and regions saw a month-on-month dip in confidence during January, with the biggest falls reported in Scotland (-32% vs -9% in December), Wales (-20% vs -1% in December) and the South West (-8% vs 5% in December). However, firms reported a month-on-month increase in confidence in London (up five percentage points to 3%), the South East (up seven percentage points to -4%) and North West (up eight percentage points to -5%). Yorkshire business confidence remained steady month-on-month at -4%.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Although confidence has fallen slightly in the region this month, it’s promising to see that firms are feeling optimistic that about their prospects improving in the months ahead now the vaccine roll-out is underway.

“The current restrictions will present challenges, but we will remain by the side of firms across the East Midlands to help them to navigate this difficult landscape, and to help them look ahead with confidence.”