EAST MIDLANDS BUSINESS CONFIDENCE IMPROVES FOR THIRD MONTH

EAST MIDLANDS BUSINESS CONFIDENCE IMPROVES FOR THIRD MONTH

Lloyds Bank’s Business Barometer for August 2020 shows:

Overall confidence of firms in the East Midlands rose 15 points in the past month to -10%

Firms’ confidence in their own business prospects was -12%, compared with -21% in July

East Midlands is region where fewest companies are using the furlough scheme

**

Business confidence in the East Midlands improved for the third consecutive month during August, rising 15 points to -10%, 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 at -12%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -10%.

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

When asked about the impact COVID-19 was having on their business, the majority of firms continued to see demand negatively affected during August, but with the picture improving month-on-month. 60% experienced a fall in demand for their products and services, down five points on the month before. Meanwhile, 6% experienced an increase in demand, up one point on July.

More than half (52%) of East Midlands businesses surveyed said they weren’t currently using the Job Retention Scheme, the largest number with no staff on furlough of all UK regions.

When asked about social distancing measures, more than half (52%) of businesses said they could, in theory, operate at full capacity while remaining COVID-secure, although more than a fifth (21%) said they couldn’t operate fully within the rules.

Of the 52% of businesses reporting disruption to their supply chain during August, 28% expected the situation to improve within three months, while 8% expected it would take more than 12 months to return to normal levels.

Amanda Dorel, regional director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s promising to see business confidence improve for the third consecutive month.

“The region’s hospitality businesses will have benefitted from the government’s Eat Out to Help Out scheme and VAT cuts, while areas like the Peak District have seen an influx of staycation visitors and day-trippers, bringing business to the area. In Leicester, it’s also encouraging to see more businesses are being given the greenlight to reopen.

“Nevertheless, big challenges clearly remain. We’ll be by the side of East Midlands firms as they plan ahead for the future.”

National overview

Overall UK confidence rose eight points during August to -14%. The South East became the first region to register a positive reading since March, after confidence climbed from -31% in July to 1% this month. The South West and Scotland were least confident in August at -25% and -35% respectively.

All four major industry sectors reported confidence at the highest levels since March. Manufacturing saw the sharpest increase of 14 percentage points to -7%, while construction rose 11 percentage points to -11%. The retail sector rose to -8% and services increased to -18%.

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “With business confidence sitting well below the long-term average, and official data for Q2 confirming the UK re-entered recession, the shape of any economic recovery remains highly uncertain. Nevertheless, it is encouraging to see gradual improvements in trading prospects and economic optimism, albeit from a low base, which will hopefully continue over the coming months.”**


< Back