Business confidence in the East of England has experienced a significant decline, falling by 28 points in December to a mere 20%, according to the latest Business Barometer from Lloyds. This stark drop reflects a decreasing sentiment among companies regarding their own business prospects, which dipped by 55 points to 17%. In conjunction with a three-point decrease in confidence about the overall economy, now at 22%, the resultant headline reading reinforces concerns about economic stability in the region.
The Business Barometer, a monthly survey incorporating responses from 1,200 businesses and operational since 2002, aims to provide early indicators of economic trends both regionally and across the UK. The findings for December suggest that businesses are increasingly turning their attention to areas for potential growth over the next six months, with top priorities identified as evolving their offerings, which includes the introduction of new products or services (41%), investing in their workforce, notably through training initiatives (37%), and adopting new technologies, particularly AI and automation (35%).
On a national scale, the UK saw an overall decrease in business confidence by two points to 39%, although this figure remains above the long-term average of 29%. Notably, while firms manifested improved confidence in the broader economy—recording a rise of five points to 31%—their expectations regarding their own trading capabilities plummeted by eight points to 47%.
Regionally, London emerged as the most confident area, achieving a score of 53%, followed closely by the North West at 50%. In contrast, the service sector in the UK endured a decline, falling 11 points from 46% to 35%. However, this decline has been somewhat mitigated by increases in both the manufacturing and retail sectors, which climbed by 10 points to 42% and 43%, respectively. Interestingly, these results mark a reversal in the previous four-month trend where services had outperformed both manufacturing and retail. The retail sector noted an uptick in trading prospects for the first time in three months, with the construction sector maintaining steady confidence at 41%.
Kirsty Sadler, regional director for the East of England at Lloyds, commented on the situation, stating, “While confidence has fallen this month, we know businesses in the East are focused on preparing for the year to come, and building the strongest possible foundations for fresh growth.”
Hann-Ju Ho, Senior Economist at Lloyds Commercial Banking, observed, “In the last few months overall confidence has fallen incrementally, and in December the trend continued as it fell by 2 points to 39%. The key difference in this month’s results is that the fall in confidence is driven by firms’ own trading prospects which have proven to be resilient over the last quarter.” His remarks highlight a more optimistic outlook regarding broader economic sentiment moving into 2025, suggesting potential resilience among firms looking to navigate forthcoming challenges.
As the region prepares for the new year, the emphasis on innovation and adapting to technological advancements, particularly through AI and automation, may play a critical role in shaping the business landscape.
Source: Noah Wire Services