South East: Business confidence falls in region, says Lloyds report

Business confidence across the South East fell three points during May to 23% according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region reported lower confidence in their business prospects at 28% and lower economic optimism at 17%. Together, this gives an overall confidence of 23%, which is three points below last month’s figure.

Companies’ hiring intentions showed that a net balance of 21% of businesses in the region expect to hire more staff during the next year, up nine points on last month.

Nationally, overall confidence climbed three points to 35%, as firms’ confidence in their own business outlook rose even though their optimism about the economy slipped.

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

Mark Burton, regional director for the South East at Lloyds Bank Commercial Banking, said: “Businesses are increasingly concerned about the wider economy and their own prospects.

“But despite the uncertainty, their confidence in their own business prospects is holding firm and hiring plans have actually increased, which is a positive sign for the region’s economy overall.”

Across the region, a net balance of 12% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down four points on a month ago.

Regional picture

Overall confidence was highest among businesses in the West Midlands, at 58%, followed by London (52) and the South West (41%).

Businesses in the East of England were least confident, with an overall confidence of 13%, 22 points below the national average.

 Sectors

Overall confidence was strongest in the communications sector, at 50%. Transport and business and finance were the next most confident, at 43%, although that level represented a fall in both sectors.

Retail confidence bounced back strongly as the weather improved in May, rising 23 points to 38%, although manufacturing fell seven points to 33%.

Weakest confidence was in the mainly public sector at 21%.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “Business confidence is rising across the UK and most firms appear to be brushing off the economic slowdown in the first quarter, with national levels hitting a four-month peak in May.

“As EU negotiations enter a critical stage, it’s interesting to see that more than a third of firms across the UK anticipate Brexit will have a positive impact on their business activity.”