Business confidence on the up in East of England


Companies expect a rebound in economic activity and sales this year, according to the ICAEW report (Photo: John Baker)

The business confidence monitor from chartered accountancy body the Institute of Chartered Accountants in England and Wales (ICAEW) found that companies' increased confidence probably came from a rise in exports in the region, which grew faster than in any other part of the UK at 2.6%.

Domestic sales performance also fared better than the national picture - down 1.6% compared to the national figure of 2.2% - but remained very weak by historical standards, the report found.                                                                                                 

Overall, the East of England’s resilient sales performance could be attributed to its strength in the digital economy, food production and pharmaceuticals, ICAEW said.

However, 47% of businesses in the East of England cited customer demand as the most widespread growing challenge in Q1 of 2021, while 26% of businesses reported transport issues as a growing issue.

Additionally, 23% of companies cited growing difficulties over their ability to expand into new markets.

And concerns over late payments have almost doubled among businesses in the region compared to last year - now with 33% of businesses concerned about the issue.

Looking ahead, companies said they expect a rebound in economic activity and sales this year.

As a result of the fall in domestic sales and of input price inflation at 1.3%, profits declined at a rate faster than during the 2008 global financial crisis.

Harpreet Panesar, ICAEW regional director for the East of England, said: "Companies in the East of England have had a very challenging year, but promising vaccine developments and resilient sales have boosted business confidence in the region and laid the foundations for a strong economic recovery.

"As we look towards spring and summer, we want to see the Chancellor use the upcoming budget to provide a bridge to sustainable and resilient economic recovery, getting people back to work, helping exporters, and investing in digital technology to make our businesses competitive in the 21st century economy."