Business confidence in the East Midlands rose 14 points during February to 52%, 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 13 points to 52%. When taken alongside their optimism in the economy, up 15 points to also reach 52%, this gives a headline confidence reading of 52% (vs. 38% in January) – the third strongest level in the UK in February after Scotland (56%) and the North East (54%).
A net balance of 35% of businesses in the region expected to increase staff levels over the next year, up nine points on January.
East Midlands businesses identified their top target areas for growth over the next six months as evolving their offering, including introducing new products and services (42%), investing in their team (39%), and entering new markets and introducing new technology (both 31%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
National picture
Overall, UK business confidence dipped two points in February to 42%, driven by softening confidence from firms in both their own trading prospects (49% vs. 51% in January) and the wider economy (34% vs. 37% in January). However, companies’ hiring intentions increased to the highest level since May 2022, with 36% of firms intending to increase staff levels over the next 12 months, up three points on the month before.
Sector Insights
There was a mixed picture for sectors this month. Confidence fell in manufacturing (nine points to 40%) and construction (seven points to 38%) respectively, although results remain higher than the same time last year. In contrast, the dominant services sector was unchanged compared to January at 45%, exceeding all months of 2023 except for November. Retail confidence was broadly steady, dipping one point to 41%.
Dave Atkinson, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s great to see an uplift in East Midlands business confidence this month, building on January’s optimistic outlook.
“And it’s particularly good to see so many businesses either looking to invest in their team or grow their workforce over the months ahead. This reflects a focus on skills and employment in initiatives like the Loughborough Town Deal, and Nottingham’s newly unveiled Economic Plan, and will have benefits that will cascade across communities.
“Whatever businesses’ plans for the months ahead, we’ll continue to be by their side to help translate ideas, innovation and opportunity into growth.”
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “This month’s data still reflects a positive mood among businesses despite a marginal fall in overall confidence. Firms appear to be upbeat about their prospects and the economy, supporting their positive staffing expectations.
“Looking at the sectors, there is a mixed picture. There was a slight fall in confidence reported in the manufacturing and construction sectors, while retail and services stood their ground – remaining unchanged compared to January’s figures. But despite the manufacturing and construction fall, businesses are still showing high levels of confidence.
“The split across the regions also provides reason to view the dip in confidence at the broader UK level cautiously. Six regions have reported an increase in confidence while the other six have reported a decrease. So, scratching the surface, we see a story that continues to show a more positive outlook for the year ahead.”
