East Midlands businesses plan hiring spree as confidence bounces back

Amanda Dorel, Regional Director of the Midlands at Lloyds Bank

Business confidence in the East Midlands rose 13 points during May to 19 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the East Midlands report higher confidence in their business prospects, up 10 points to 25 per cent, and higher economic optimism, up 17 points to 13 per cent. Together, this gives an overall confidence reading.

This month’s rises make the East Midlands the third most confident region in the UK, alongside Wales where businesses also register a reading of 19 per cent in May. They sit just behind Yorkshire and the Humber where businesses have the highest overall confidence (23 per cent) and the West Midlands (21 per cent).

The rise in confidence was also reflected in businesses’ hiring intentions, with the survey showing a net balance of 18 per cent of businesses in the region expect to hire more staff during the next year, up 12 points on last month.

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

Amanda Dorel, Regional Director for the East Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see confidence bounce back in the East Midlands this month, following a drop in April.

“With greater confidence in their own prospects, firms are also planning to recruit more staff in the next 12 months, boosting employment prospects for local people.

“We’ll be standing by the side of firms’ throughout 2019 as they continue to invest in their growth and as part of this, we’ve pledged to lend £2.5 billion to businesses in the region during 2019.”

Across the East Midlands, a net balance of 20 per cent of businesses say they feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, down four points on a month ago.

National picture

Across the UK, overall confidence slipped four points to 10 per cent 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 the East of England are the least confident, with an overall confidence of minus six per cent, 16 points below the national average.

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).