EAST OF ENGLAND BUSINESS CONFIDENCE BACK ON THE RISE

Lloyds Bank’s Business Barometer for October 2022 shows: 

• Business confidence among firms in the East grew eight points during the last month to 9%
• Region’s businesses identify top growth opportunities as diversifying into new markets (29%), evolving their offering (28%) and investing in their teams (26%)
• Overall UK business confidence fell one point during the last month to 15%, with five out of 11 nations and regions reporting a higher reading than September

Business confidence in the East of England rose eight points during October to 9%, according to the latest Business Barometer from Lloyds Bank Commercial Banking – conducted between 3^rd-17^th October.

Companies in the region reported higher confidence in their own business prospects month-on-month, up 17 points at 21%.  When taken alongside their optimism in the economy, down three points to -4%, this gives a headline confidence reading of 9%.

East of England businesses identified their top target areas for growth in the next six months as diversifying into new markets (29%), evolving their offering (28%) and investing in their teams (26%).

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

A net balance of 17% of East businesses expect to increase staff levels over the next year, up 12 points on last month.

Overall UK business confidence fell one point during October to 15%, in line with the average over the last three months. Firms’ outlook on their future trading prospects was up two points to 27%, and a net balance of 21% are planning to create new jobs, up four points on last month. However, businesses optimism in the wider economy dropped three points to 2%.

Alongside the East of England, four other UK regions and nations recorded a month-on-month increase in optimism in October. Of those, London (up 16 points to 49%), the North West (up 14 points to 28%) and Wales (up nine points to 5%) saw the largest monthly increases, with London remaining the most optimistic region overall.

Dene Jones, regional director for East of England at Lloyds Bank Commercial Banking, said: “This latest rise in confidence among East of England firms comes slightly against the run of play, but harvest season is a boon time for many in the region’s agriculture sector who are hoping to reap rewards where they can.

“Whatever the industry, maintaining positivity and resilience as we enter winter will require businesses to keep a close eye on cashflow so they’re in the best position possible to capitalise on any growth opportunities that come their way. We’ll remain closely by the side of companies across the East to ensure they have the support they need to survive and thrive.”

Business confidence in the manufacturing sector fell for the fifth month in a row, to 13%, down 1 percentage point, the lowest confidence level since February 2021. Confidence in the retail sector declined by 6 percentage points to 9%, while confidence in the services sector also fell to 16%, both the lowest levels since early 2021.

However, the construction sector saw a 10 percentage point rise to 20%, although this level still remains weaker than in the first half of the year.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “While business confidence has marginally fallen this month, along with a drop in forward looking economic optimism, it is encouraging to see businesses still looking to increase their headcounts. However, cost pressures remain evident as businesses raise prices to protect their margins and wage pressure continue to be impactful. Given the recent turbulence in financial markets, it will be interesting to see how this will affect business confidence.”