Lloyds Bank’s Business Barometer for October 2021 shows:
- Region’s businesses among most confident in the UK with reading of 55%
- Number of firms looking to hire staff also increases
- Overall UK business confidence remains strong at 43% with 37% of firms planning on creating new jobs in the next twelve months
Business confidence in the East Midlands rose eight points during October to 55%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East Midlands reported higher confidence in their own business prospects month-on-month, up 16 points at 52%. When taken alongside their optimism in the economy, up two points to 59%, this gives a headline confidence reading of 55%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
A net balance of 43% of businesses in the region expect to increase staff levels over the next year, up four points on last month.
Overall UK business confidence remained steady month-on-month, dipping by just three points to 43% and remaining comfortably above the year-to-date average of 26%. Hiring intentions were unchanged on September’s reading at 37%, while firms’ optimism in the economy (down four points to 44%) and confidence in their business prospects (down one point to 42%) were down marginally.
All UK nations and regions reported positive confidence readings for the seventh consecutive month. Firms in London (up three points to 65%), the North East (unchanged at 61%) and the East Midlands (up eight points to 55%) had the highest confidence readings, while businesses in the South East (down 11 points to 21%) and Wales (down 23 points to 23%) had the lowest overall confidence levels.
Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s great to see confidence rise once again and the East Midlands is now among the most optimistic areas in the UK. Confidence has been increasing since coronavirus restrictions were eased and there is now a sense that businesses are on a firmer footing.
“We hope that firms can end what has been a turbulent 2021 on a high and we will work with them over the remaining months to help them make the most of the opportunities that come their way.”
From a sector perspective confidence remained strongest in manufacturing, rising to a five-month high of 51% (up two points from 49%) with trading prospects being particularly positive (60% expecting stronger activity in the year ahead). Additionally, 68% of manufacturing firms are planning on bringing all furloughed staff back which is more than any other sector. However, these firms are also less likely to say it is easier to find people with the right skills and experience.
Business confidence in retail and services fell slightly to 37% (down five points from 42%) and 43% (down four points from 47%) respectively, although they remain higher than three months ago. 59% of firms in both retail and services expect all their furloughed staff to return, less than in manufacturing. Additionally, higher proportions of firms said that it is becoming easier to hire people with appropriate skills and experience proportions (46% in retail and 53% in services, compared with 41% in manufacturing).
Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “While economic optimism saw a slight dent in October due to rising costs and the on-going supply chain issues, it is clear that firms are still feeling relatively buoyant as overall business confidence remains high and above the long-term average.
“With sixty percent of firms saying that they expect to bring all their furloughed staff back to work, and a further thirty percent intending to bring back more than half, it should bode well for the labour market as we head into the winter.”
