UK business confidence has fallen for a second consecutive month in November whilst hitting a fresh 4-month low.
The release of the latest Lloyds Bank Business Barometer showed that UK business confidence in November declined to its lowest level since July. The main cause for the drop was new COVID-19 restrictions placed upon UK firms under a national lockdown.
However, providing some comfort was the fact that British companies are less pessimistic following the news of a breakthrough in developing a vaccine.
The Lloyds Bank Commercial Banking Business Barometer fell by three percentage points to -21%. Confidence declined in manufacturing which saw a fall of 10 points to ‑25%. Confidence within the construction sector fell by 13 points to ‑23%. and in retail which declined by five points to ‑12%.
Meanwhile, there was a boost of confidence in the services sector which increased slightly by three points to ‑21%. The increase followed a heavy decline in October.
Regional Disparity
Regionally, the North West recorded the sharpest decline in confidence, down 26 points to -28%. Over the past three months, the North West had recorded a higher business confidence level than the rest of the UK average.
The North West was closely followed by Northern Ireland which fell by 14 points to -25%. The third was the East of England which fell by eight points to -21%. In Scotland, business confidence declined for a second consecutive month to -38%.
The highest levels of confidence were recorded in the North East at -8%. whilst business confidence improved the most in Yorkshire & Humber which was up 18 percentage points to -11%.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, commented:
“The sustained number of coronavirus cases and more restrictive lockdown measures saw overall business confidence fall again this month. Firms across the sectors also continue to remain cautious as they prepare for a new trading relationship with the EU. However, confidence increased following the news of a potential vaccine to help combat the virus. The months ahead will be key for businesses as they navigate the winter months and adapt to the evolving landscape.”
Hann-Ju Ho
An Increase in Confidence
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added:
“Regional confidence remains unsteady as each region grapples with the new lockdown or increased level of restrictions in their area. The tightening of measures had a negative impact on the Services sector last month, especially the leisure and arts that bore the brunt of preventive measures to help contain the pandemic. However, as we approach the festive season, and with restrictions set to ease once England-wide lockdown ends, we have seen an increase in confidence. We hope this continues in the months ahead as it brings a much-needed boost for the sector and wider industries.”
Paul Gordon
