Companies in the East reported higher confidence in their own business prospects month-on-month at 5%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -8%, the second highest of any UK region after the North West.
When it comes to businesses’ hiring intentions, a net balance of 11% expect to reduce staff levels over the next year, up two points on last month.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Across the UK, overall confidence dropped seven points month-on-month to -18%. While confidence about businesses’ own trading prospects dipped by only one point, their optimism in the economy fell by 14 points. UK business confidence has remained in negative territory since April, but the picture had been improving until October, with confidence steadily rising since May.
David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “With parts of the region moving to a tier two lockdown this month, it’s unsurprising to see confidence dipping slightly. That said, businesses in the East of England have proven their resilience during this crisis and it’s encouraging to see some reporting a more positive outlook towards their own business prospects.
“However, as restrictions continue to increase across large parts of the country, it’s clear many challenges remain ahead. We’ll be by the side of local businesses and will continue to provide the help and support they need in the coming months.”
National overview
The North West had the highest confidence in October at -2%, followed by the East of England (-8%), and North East (-10%). Meanwhile, optimism fell 21 points in Yorkshire to -29%, making it the least confident UK region.
In the industry sectors, services slipped back, with confidence declining by fourteen points to -24%. The decline was driven by hospitality and arts and leisure grappling with the implications of recently introduced measures to tackle the pandemic. Manufacturing and retail logged modest improvements, up three points to -15% and up one point to -7% respectively.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “The resurgence in coronavirus cases and the reintroduction of local lockdown measures saw overall business confidence fall back sharply this month. Added to that are ongoing uncertainties regarding new trading arrangements with the EU in January. All of this makes the economic outlook uncertain and the period ahead will be pivotal for businesses as they navigate the winter months and continue to adapt to the evolving landscape.”
The Business Barometer’s measure of overall business confidence is the average of responses about how businesses regard the economic outlook and their own trading prospects.
· The overall ‘balance’ of opinion weighs up the percentage of firms that are positive in outlook against those that are negative. Responses are weighted to reflect the composition of the economy.
· The industrial sector in this report represents mainly manufacturing and construction; the consumer services sector comprises distribution and transport & communications; business & other services consists of financial & business services and the public sector.
· The Business Barometer results provide early signals about UK economic trends. The survey started in January 2002 and research is carried out monthly on behalf of Lloyds Bank by BVA BDRC.
· This survey was conducted with 1,200 companies – including 100 businesses in the East of England between 1st and 15th October.