Confidence among South East firms has dropped by more than half in the past month as businesses lost their optimism about the economy, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Overall confidence fell 16 points to 14% in October, driven by a dip in optimism about the economy, which fell 22 points.
A net balance of 3% of companies said they are pessimistic about the outlook for the economy, compared with last month when a net balance of 195 said they were optimistic.
Firms’ confidence in their own business prospects fell 12 points but was still among the highest in the UK at 3%, behind London (44%) and the North West (39%).
Companies’ hiring intentions showed a net balance of 18%, where businesses in the region expect to hire more staff during the next year, down six points on last month.
Across the UK, overall confidence fell 10 points to 19%, its sharpest fall and its lowest level all year, as firms’ optimism about the economy slumped 18 points to just 8%. Companies’ confidence in their own business prospects fell three points to 29%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Phillip Kirk, regional director for the South East at Lloyds Bank Commercial Banking, said: “It’s disappointing to see overall confidence across the South East take such a fall this month in the face of increasing uncertainty.
“But the fact that firms’ confidence in their own prospects hasn’t slipped back quite so far, and remains one of the highest in the UK, shows that, while cautious, they remain resilient.
“The hope now is that a busy festive period might unlock some consumers’ reluctance to spend, while any greater certainty businesses might get during that period will give them the confidence to invest.”
Across the region, a net balance of 17% 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, an increase of 16 points on a month ago.
But a net balance of 11% said they would be more confident about their business prospects if a deal on Brexit was agreed in November.