Businesses in the East of England report the lowest confidence in the UK during May, falling eight points to minus six percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region report lower confidence in their business prospects, down nine points to three per cent. When taken together with their views on the UK economy as a whole, this gives the overall confidence reading.
The research also shows a net balance of zero per cent of businesses in the region have intentions to create new jobs in the next year, down five points on last month.
Across the region, a net balance of 35 per cent of businesses say they feel the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up 15 points on a month ago.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
David Atkinson, Regional Director for East of England at Lloyds Bank Commercial Banking, said: “It’s disappointing to see that small and medium sized businesses in the East of England are the least confident in the UK.
“Whatever the economic challenges that lie ahead, we will stand by the side of East Anglian businesses. That’s why we’ve committed to lend £1.7 billion to local businesses this year as part of our plan to help Britain prosper.”
Across the UK, overall business confidence slipped four points to 10 per cent in May as firms’ confidence in their own prospects fell six points to 17 per cent, while their economic optimism dropped two points to two per cent.
Businesses in Yorkshire and the Humber show the most confidence, at 23 per cent, ahead of the West Midlands (21 per cent).
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Overall business confidence continues to sit below the long-term average. A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU. It’s encouraging to note that while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.”
Rise in manufacturing confidence
Confidence rose among manufacturing businesses for the second consecutive month, up 5 points to a four-month high of 21per cent. The sector was the most confident in both trading prospects and economic optimism.
The services sector continued to report the weakest overall confidence (down 5 points to 7 per cent), reflecting firms’ more negative economic optimism and the expected impact of the UK leaving the EU. Confidence also fell in construction (down 3 points to 12 per cent) and retail (down 5 points to 11 per cent).