Business confidence surges within the East Midlands

Business confidence in the East Midlands rose 18 points during February to 10%, based on the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies within the East Midlands reported higher confidence in their own business prospects month-on-month, up 13 points at 4%. When taken alongside their views from the economy, up 22 suggests 16%, this gives a headline confidence reading of 10%.

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

When you are looking at jobs, a net balance of 13% of businesses in the region expect to increase staff levels over the next year, up 16 points on recently.

Across the UK, overall business confidence rose in February as the government announced it would be creating a ‘roadmap’ out of lockdown. Confidence increased by nine suggests 2%, the first net positive reading since March 2021. Firms’ economic optimism also jumped 12 points month-on-month to 2%.

All UK nations and regions saw a month-on-month rise in confidence in February, with the East Midlands (10% vs -8% in January) reporting the joint biggest increase alongside its northern border West (13% vs -5% in January), followed by Wales (-5% vs -20% in January) and Scotland (-17% vs -32% in January). Despite this, four remained in net negative territory with Wales (-5%), the The west (-6%), the East of England (-8%), and Scotland (-17%) all at a negative balance.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “Firms’ confidence is rebounding strongly in the area as businesses start to look ahead to the easing of lockdown restrictions. The very first time since March last year, a net balance of firms are now looking to increase their staff levels over coming months, which will undoubtedly give the region’s economy a significantly needed boost.

“Of course, businesses across the East Midlands continue to face significant challenges and we remain by their side, offering the support they need to navigate the road ahead.”

Confidence increased across all broad industry sectors to the highest levels since March 2021. Following a soft start to the year, manufacturing jumped by fourteen suggests 5%, while construction rose eight suggests 7%. Confidence in retail extended nine points to 3%, while services advanced by ten suggests 1%, led by broad-based improvements within the subsectors.

Hann-Ju Ho, Senior Economist for Lloyds Bank Commercial Banking, said: “The uplift running a business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival later on and the continued success from the vaccine rollout. In the coming weeks, announcements within the Budget and prospects of the easing of lockdown restrictions will hopefully assistance to bolster the recovery in business confidence as the economy starts to reopen.”