East Mids business confidence remains high despite drop

Business confidence in the East Midlands remains “resilient” at 28%, despite falling by 10 points during August in the biggest fall of any region or nation in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East Midlands reported lower confidence in their own business prospects month-on-month, down six points at 22%. When taken alongside their optimism in the economy, down 13 points to 34%, this gives a headline confidence reading of 28%.

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

A net balance of 2% of businesses in the region expect to increase staff levels over the next year, down seven points on last month.

Overall UK business confidence rose six points in August, reaching 36%, the highest level recorded since May 2018. When asked about their overall trading prospects businesses reported a six-point increase on July’s reading at 34% and firms’ confidence in the UK economy also increased six points to 39%.

All UK nations and regions had a positive confidence reading in August. The most confident regions were the North West (64%), North East (46%) and London (41%). All bar three areas reported growth in confidence in August, with the West Midlands (down three points to 27%) and Yorkshire and Humber (down two points to 26%) also reporting marginal falls.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s clear that businesses in the East Midlands are still facing challenges as they move towards complete recovery from the pandemic. What’s great to see is that overall confidence is still strong, with firms concentrating on getting back to business as usual.

“We will continue to support local businesses as part of our commitment to helping the region prosper.”

In sector terms, there was notable strength in sectors benefiting from the further easing of Covid restrictions. Services confidence saw the greatest month-on-month increase, rising by 8 points to 36%, the highest level since January 2018. Confidence in both manufacturing and construction also picked up (both up 7 points to 40%), led by rises in trading prospects for the year ahead. The increase in manufacturing confidence came despite ongoing supply disruptions, although the level remains below the high in May. Retail confidence posted a smaller 2-point rise to 34%, remaining below the recent peak in May.