Lloyds Business Barometer: Business confidence in the South East continues to climb

Business confidence in the South East increased for the second consecutive month, rising two points during the beginning of June to 32%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the South East reported higher confidence in their own business prospects month-on-month – up 12 points at 45%. When taken alongside their optimism in the economy, down eight points to 18%, this gives a headline confidence reading of 32%.

South East businesses identified their top target areas for growth in the next six months as evolving their offering (34%), investing in their team (30%) and introducing new technology (27%).

A net balance of 26% of businesses in the region expect to increase staff levels over the next year – up two points on last month.

Overall UK business confidence increased by nine points to 37% in June, with all regions reporting a positive confidence reading. Eight out of 10 regions reported a higher confidence reading than in May.

The East Midlands reported the highest levels of business confidence at 52% (up 35 points on last month) – the highest level of any UK region or nation this year.

Scotland reported the second highest confidence reading at 50% (up 28 points month-on-month), followed by the North East at 47% (up 12 points month-on-month) and Yorkshire at 45% (up 26 points month-on-month).

London and the South West were the only regions to report a decline in confidence. In London, confidence fell by 10 points to 33%, while in the South West it fell by one point to 29%.

Business confidence for firms in the service sector rose to 37% (up 11 points) – the highest seen since February 2022.

With the recent spell of good weather and a reduction in food and energy prices, businesses in leisure and hospitality may be able to reap the rewards in the months to come. Manufacturing firms’ confidence also increased to its highest level since early 2022, rising to 50% (up 10 points) to outperform other sectors.

Paul Evans, regional director for the South East at Lloyds Bank Commercial Banking, said: “This month has seen confidence in the region increasing for the second month in a row, with firms feeling more optimistic about their own business prospects as they look to grow their operations through the summer months.

“If businesses are going to effectively capitalise on growth opportunities, they will need to keep an eye on their working capital.

“Ensuring they have the headroom to manage rising costs and short-term expenses while having funds ready to invest are all key to successfully realising their goals.”

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