Lloyds Bank’s Business Barometer for January 2019 shows:
- Overall confidence for firms in the East of England fell four points in the past month to six per cent
- A net balance of four per cent of firms are now pessimistic about the economy, a decrease of two per cent
- Firms’ confidence in their own business prospects was 17 per cent, compared with 27 per cent in December
Business confidence in the East of England fell to its lowest level in more than a year during January, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Overall confidence slid four points to six per cent, the lowest since the regional Business Barometer report launched a year ago, as companies reported a dip confidence about their business prospects, down 10 points to at 17 per cent.
But East of England firms’ pessimism about the economy lessened slightly, from six per cent to four per cent.
Businesses’ hiring intentions showed that a net balance of eight per cent of firms in the region now expect to reduce their headcount during the next year. At the end of last year, a similar proportion (eight per cent) expected to create new jobs.
This comes despite overall confidence across the UK rising two points to 19 per cent as firms’ optimism about the economy climbed three points to 10 per cent. Companies’ confidence in their own prospects edged up one point to 27 per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Steve Elsom, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Firms across the region have started off the year on a cautious footing with hiring intentions, confidence in business prospects and optimism about the wider economy all falling.
“There’s no doubt that companies across the UK are navigating uncertain times, which makes planning ahead hard. Firms in the East of England have proven their resilience time and time again and we’re committed to be by the side of businesses whatever the year ahead may bring. That’s why we’ve pledged to lend up to £1.7billion to East of England businesses during 2019.”
Across the region, a net balance of 13 per cent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, compared with 18 per cent a month ago.
Regional picture
Businesses in London showed the most confidence, at 36 per cent, ahead of the West Midlands (31 per cent) and the South East (23 per cent).
Those in Scotland and the North East were the least confident, with an overall confidence of just one per cent, 18 points below the national average.
Sectors
The construction and manufacturing sectors had both the highest confidence (30 per cent and 28 per cent respectively) and the strongest hiring intentions (26 per cent and 30 per cent respectively).
Meanwhile, the retail (14 per cent) and services sectors (19 per cent) had both the lowest confidence as well as the weakest hiring intentions (nine per cent and eight per cent respectively).
These pictures were also reflected in the sectors’ views about the impact of Brexit. Net balances of 15 per cent (services) and 13 per cent (retail) expected the UK’s exit from the EU to have a negative impact, compared with just three per cent in manufacturing. A net balance of nine per cent of construction firms expect it to have a positive impact.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Despite businesses ending 2018 on a low, it’s good to see that, across the UK as a whole, they’ve started the year on a slightly more positive footing.
“The results for the manufacturing and construction sectors are particularly encouraging and we hope the picture will improve further as we move into February and beyond, if geopolitical uncertainties subside.”