Business confidence in East Midlands holds steady

Business confidence in the East Midlands fell one point during August to 11%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region reported lower confidence in their own business prospects month-on-month, down 11 points at 4%. When taken alongside their optimism in the economy, down 6 points to 2%, this gives a headline confidence reading of 11%.

East Midlands businesses identified their top target areas for growth in the next six months as evolving their offering (34%), investing in their teams (22%) and diversifying into new markets (21%).

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

A net balance of a third (33%) of East Midlands businesses expect to increase staff levels over the next year, up 20 points on last month.

Overall UK business confidence fell nine points during August to 16%, its lowest level since March 2021. Firms’ outlook on their future trading prospects was down 32 points to 5%, and their optimism in the wider economy dropped six points to 6%. The net balance of businesses planning to create new jobs also decreased five points to 16%.

While every UK region and nation reported a positive confidence reading in August (except the South East, where confidence dropped 15 points to 0%), only three recorded a month-on-month increase in optimism. The three regions were the North West (up 26 points to 44%), South West (up 12 points to 23%) and Yorkshire (up nine points to 23%), with the North West now the most optimistic region overall.

Dave Atkinson, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see confidence among East Midlands firms remain steady, despite the multitude of economic headwinds they continue to face.

“In order to remain resilient, it’s crucial that they keep a close eye on working capital and make themselves aware, if they’re not already, of the many funding options available to ensure fluctuating demand doesn’t have a damaging impact on their cash flow.

“We’ll be firmly by the side of businesses across the region to help them navigate the challenges that lie ahead.”