Business confidence in the South East fell 14 points during September to 33%, 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 six points at 42%. When taken alongside their optimism in the economy, down 23 points to 24%, this gives a headline confidence reading of 33%.
South East businesses identified their top target areas for growth in the next six months as evolving their offer (39%), investing in their team (36%) and breaking into new markets (30%).
A net balance of 28% of businesses in the region expect to increase staff levels over the next year, down six points on last month.
Overall UK business confidence fell five points in September from 41% to 36%. Firms’ outlook on their own trading prospects remained strong at 41% despite a five-point drop on last month, and their optimism in the UK economy also remained robust at 30%, down by seven points on August’s reading.
Businesses hiring intentions remained upbeat with 26% of firms reporting plans to increase their staff levels over the next year, down five points on last month.
Companies in London reported the highest levels of business confidence for the second consecutive month at 44% (down eight points month-on-month). Firms in Yorkshire reported the second highest reading at 40% (up eight points month-on-month), followed by those in the North West at 38% (up four points month on month).
The fall in business confidence this month centred around the retail and services sectors, following strong sentiment in August.
Retail confidence fell to 32% (down 12 points) dragged down in particular by trading prospects, while services confidence declined to 36% (down eight points). Construction confidence also fell to 36% (down eight points). However, manufacturing was stronger, with confidence rising to a three-month high of 36% (up six points).
Becci Wicks, regional director for the South East at Lloyds Bank Commercial Banking, said: “After an exceptional rise in business confidence in August, it’s no surprise to see a dip in confidence levels this month.
“But encouragingly, business confidence remains at a strong level and offers firms in the South East a platform to maintain positive momentum for the final quarter of the year.
“Capitalising on this confidence is going to hinge on shoring up business plans so that firms can work quickly to capitalise on when opportunities when they arise.
“This means forecasting in as much detail as possible and freeing up working capital to invest where needed.
“We’re here at the side of business to offer the advice and solutions that will help deliver their ambitions.”
