East Midlands business confidence rises, says new report

In December, East Midlands business confidence rose by five points to 34%, making it one of the only two regions in the UK to experience an increase, according to Lloyds Bank Commercial Banking’s latest Business Barometer.

The West Midlands also saw a one point increase to 33%.

Companies in the East Midlands reported higher confidence in their own business prospects, up 13 points to 51%.

When combined with their optimism in the economy, which decreased by four points to 17%, the overall confidence reading stands at 34%.

Top growth areas identified by East Midlands businesses for the next six months include investing in its teams (51%), evolving its offerings (32%), and investing in sustainability (26%).

The Business Barometer, surveying 1,200 businesses monthly, offers early insights into UK economic trends regionally and nationwide.

In the East Midlands, a net balance of 40% of businesses expect to increase staff levels over the next year, marking a ten-point increase from the previous month.

On a national scale, overall UK business confidence declined by two points in December to 35%, the first decrease since August.

This drop was mainly driven by firms’ outlook on the overall UK economy, which decreased by eleven points from 38% to 27%.

Companies’ optimism in their own trading prospects also decreased.

Hiring intentions saw a slight decline, with 29% of firms intending to increase staff levels over the next 12 months, down six points month-on-month.

Dave Atkinson, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Businesses in the East Midlands have marked the largest rise in confidence of any UK region or country as we conclude the year. The rise was recorded following the Chancellor’s Autumn Statement where a new East Midlands Investment Zone, which could bring in £383m of private investment and create 4,200 jobs, as well as a deal to bring devolution to Greater Lincolnshire, was announced.”

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “This December data was collected following several key announcements, including energy prices rises and the UK economic outlook being revised down in the Autumn Statement. All of this will undoubtedly have had an impact on business confidence as we head into 2024.

 “Businesses are also balancing cost pressures with a challenging labour market that will see increases to minimum wage in April 2024, as perhaps indicated in the wage growth figures, at a time when they are managing staff retention and recruitment decisions. However, over the course of the year confidence has steadily increased from an average confidence of 25% in the first three-months of 2023 and ending the year with a three month average of 39% – an indication of the positive trajectory business has seen this year. This provides a healthier position to begin 2024 with, compared to 2023.”