South East: Business confidence hits a new low as Brexit looms
Business confidence in the South East fell by 17 points to 8% during August, making it the lowest ranking region in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Together, this gives an overall confidence of 8%, which is 17 points below last month’s figure of 25%.
Companies’ hiring intentions showed a net balance of 19% of businesses in the region expect to hire more staff during the next year, down one point on last month.
Nationally, overall confidence fell six points to 23% as firms’ optimism about the economy dropped eight points to 17%. Firms’ confidence in their own business prospects dropped five points to 29%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Phil Kirk, regional director for the South East at Lloyds Bank Commercial Banking, said: “Businesses in the South East were the least confident in the UK on the outlook of the UK economy
“More reassuringly, firms’ hiring plans have remained relatively unchanged, as businesses hold out in the hope the economy might improve in the longer-term.”
Across the region, a net balance of 20% 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, up three points on a month ago.
Regional picture
Businesses in London and the West Midlands showed the most confidence, both at 37%, ahead of the North West (35%).
Sectors
From a sector perspective, firms in the manufacturing sector remained most confident at 38%, but confidence of construction businesses fell sharply by ‑12 points to 36%, closely followed by consumer services (‑6 points to 22%) and other services (‑6 points to 18%).
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking commented: “Business confidence was resilient in the first half of the year, but has eased back recently. This reflects changes in perceptions of Brexit risks, which underscores the importance of current EU-UK negotiations.”
