Business confidence in the East of England rose 12 points during July to -26%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the East reported higher confidence in their own business prospects month on month at -31%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -26%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
The majority of firms continued to see demand negatively affected by coronavirus during July. 75% experienced a fall in demand for their products and services, up four points on the month before. Meanwhile, just 6% experienced an increase in demand, up three points on June.
When asked about job retention among firms with furloughed staff, only a quarter (24%) expect to retain more than 90% of their staff.
41% of East of England firms surveyed said they weren’t currently using the Job Retention Scheme.
When asked about social distancing measures, 61% of businesses said they could, in theory, operate at full capacity while remaining COVID-secure, a quarter (26%) said they couldn’t operate fully within the rules.
Of the 57% of East of England businesses reporting disruption to their supply chain during July, more than half 53% expected the situation to improve within 12 months, while 5% expected it would take more than a year to return to normal levels.
David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “Businesses in the region have had a much-needed boost in July, no doubt helped by retail, hospitality and tourism sectors restarting their operations. But despite positive signs and lockdown continuing to ease, lingering supply chain disruption and weakened demand are just two of many key challenges that companies in the East continue to face.
“We will continue to stand by the side of local businesses to provide the support they need to plan for recovery.”
At a national level, UK business confidence increased eight points to -22% during July. The North East was the most confident region at -3% followed by the West Midlands (-7%) and the North West (-15%). Wales and Scotland were the least confident with -31% and -37% respectively.
In July, the retail sector increased 11 points to -12%, manufacturing increased 14 points to -21% and services rose 10 points to -26%. However, construction fell eight points to -22% after last month’s strong increase of 30 percentage points.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “While the results suggest the economy is starting to see some improvement, economic confidence still remains in deep negative territory. The Government announcement of the slight easing of social distancing measures has now enabled over half of businesses to reach their capacity and resume their usual activities. However, how businesses will continue to respond to the Job Retention Scheme will be key in the coming months.”