Confidence of companies in the South East falls in March
BUSINESS confidence in the South East fell 25 points during March to 11 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 25 points at 17 per cent.
When taken alongside their optimism in the economy, down 26 points to four per cent, this gives a headline confidence reading of 11 per cent.
Despite the fall in confidence, South East businesses reported plans to target new growth opportunities in the next six months, including evolving their products or services (39 per cent), investing in their teams (27 per cent) and diversifying into new markets (16 per cent).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of nine per cent of South East businesses expect to increase staff levels over the next year, down 25 points on last month.
Overall UK business confidence dropped 11 points during March, from 44 per cent to
33 per cent.
Firms’ outlook on their future trading prospects (down from 45 per cent to 34 per cent) and optimism in the economy (down from 43 per cent to 32 per cent) both also fell by 11 points on February’s reading.
The net balance of businesses planning to create new jobs decreased slightly, by six points to 32 per cent.
Lloyds Bank Commercial Banking South East regional director Paul Evans said: “There’s no doubt that the combination of events in Ukraine, global inflation and rising energy costs are creating an air of uncertainty for businesses here in the South East.
“However, this isn’t affecting firms’ pursuit of growth, and with many looking to evolve their offering, it’s clear that businesses are seeking new ways to scale up.”
From a sector perspective, the impact of the war in Ukraine appears to have had the greatest impact on manufacturing and retail firms.
Both sectors saw drops in confidence of 19 per cent from February’s highs (to 35 per cent and 28 per cent respectively).
From a manufacturing perspective, confidence levels are now at their lowest since last summer, while retail has fallen to a one-year low.
In the other sectors, services dropped by six points (32 per cent), while construction dropped eight points to 43 per cent, but remained higher than at the start of the year.
There’s no doubt that the combination of events in Ukraine, global inflation and rising energy costs are creating an air of uncertainty for businesses here in the South East