East of England firms record jump in business confidence
Business / Mon 1st May 2023 at 07:13am
BUSINESS confidence in the East of England rose 18 points during April to 35% – the joint-highest increase of all the UK’s regions and nations – according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East reported higher confidence in their own business prospects month-on-month, up 15 points at 34%. When taken alongside their optimism in the economy, up 21 points to 36%, this gives a headline confidence reading of 35%.
The region’s businesses identified their top target areas for growth in the next six months as diversifying into new markets (36%), evolving their offer (32%) and investing in their team (28%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 24% of businesses in the region expect to increase staff levels over the next year, up 16 points on last month.
Overall, UK business confidence climbed one point to 33% in April. Every UK nation and region reported a positive confidence reading and six out of 11 regions recorded a higher reading than last month. London reported the highest levels of business confidence at 47% (up nine points month-on-month), followed by East Midlands (up 18 points) and North East (up three points), both at 41%.
Firms’ outlook on their own trading prospects remained strong at 39% for the second consecutive month, and a net balance of 27% of businesses are intending to increase their staff levels, up two points on March.
Ahead of the three Bank Holidays in May, firms’ optimism in the overall economy increased five points to 28% – the highest reading since June last year.
Dene Jones, regional director for East of England at Lloyds Bank Commercial Banking, said: “Businesses in the region are feeling optimistic, and anecdotally we’re hearing that many expect trading conditions to continue to improve over the summer.
“Growth in firms’ hiring intentions suggests that expansion is front of mind. Two things will fuel this growth; confidence and capital. The first is clearly in place, so now it’s a case of identifying the best ways of funding that growth.
“I know that businesses are already seeking short-term funding options so that they can make the key strategic investments that will unlock growth, using tools like invoice and asset finance. We’ll remain by businesses’ side to help them identify these options and capitalise on their momentum.”
Business confidence in the service sector rose to 36% this month, the highest since May 2022, with sentiment particularly upbeat in hospitality and financial services. While the other sectors saw slight decreases, construction remained strong at 43% while manufacturing and retail remain above last year’s lowest levels.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The recent increases in business confidence indicate that the economy entered the second quarter of 2023 with positive momentum.
“The revival in the demand for labour, which improved for the fifth consecutive month, may account for the modest uptick in wage expectations for the next twelve months.
“While firms’ concerns on overall cost pressures have eased, there is little evidence that pricing expectations have declined which may impact wider pricing decisions for the remainder of 2023.”
Throughout my lifetime I have noticed that business confidence always increases as a Conservative government is approaching a general election, especially ones where the polls say the Tories will get creamed.
The very good news is that immigration is going to save our economy. Consultants PWC say: "Following an uptick in 2022 from loosening covid restrictions and targeted schemes for Ukrainians, Afghans and Hong Kong residents, we expect that immigration to the UK will contribute between £19bn to £30bn to real GDP in 2023." Net migration in the year ending June 2022 was 504,000, not the "tens of thousands" as promised by two Conservative Home Secretaries. I'm sure the Reform Party will exploit this to their advantage. See PWC report: https://www.pwc.co.uk/services/economics/insights/uk-key-trends-in-2023.html
Sorry, a correction to my last comment. I should have said 6 Conservative Home Secretaries have promised net migration "in the tens of thousands" since 2010, but all have failed to deliver. See article: https://www.theguardian.com/politics/2022/oct/04/suella-braverman-revives-tory-pledge-to-cut-net-migration-to-tens-of-thousands
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