South East: Business confidence falls 10 points, Lloyds survey finds

Business confidence in the South East fell 10 points during February to 13% and remains the lowest in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies across the region report lower confidence in their business prospects at 17% and lower economic optimism at 9%.

Together, this gives an overall confidence of 13%, which is 10 points below last month’s figure of 23%.

While companies’ hiring intentions show that a net balance of 18% of businesses in the region still expect to hire more staff during the next year, this is down nine points on last month.

Across the region, a net balance of 18% of businesses feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, down one point on a month ago.

Nationally, overall confidence fell one point to 32%, driven by a dip in firms’ business optimism.

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: “Companies across the South East are struggling to stay optimistic about their own future performance and the economy as a whole.

“Uncertainty over the UK’s withdrawal from the EU may be playing a role, and firms in the region are sceptical about the outcome.

“But while confidence is falling, most businesses in the region still expect to invest in new staff.”

Regional picture

 The South East was the joint least confident region in the UK, alongside Wales, with an overall confidence 19 points below the national average at 32%.

Overall confidence was highest among businesses in London, at 55%, followed by the West Midlands, at 42% respectively, and the North West at 39%.

Growing confidence in transport and manufacturing

 Overall confidence in March was strongest in the transport and manufacturing sectors, at 55% and 49% respectively.

In contrast, it was weakest in wholesale (11%) and hospitality and leisure (18%).

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “While firms’ confidence in their business prospects improved slightly in March, overall business confidence was held back by a fall in economic optimism. 

“Recent progress on the Brexit negotiations has reduced uncertainty, which could continue to support business confidence going forward. The risk of rising global protectionism, however, is a growing concern.”