South East business confidence climbs in February

Companies in the South East reported higher confidence in their own business prospects month-on-month – up two points to 49% – according to the latest Business Barometer from Lloyds Bank Commercial Banking

When taken alongside their optimism in the economy, which surged 20 points to 38%, this gives a headline confidence reading of 43% (vs 32% in January) – a second month of growth following a three-point rise in confidence between December 2023 and January.

A net balance of 33% of businesses in the region is also expected to increase staff levels over the next year, up 28 points on last month.

South East businesses identified their top target areas for growth in the next six months as investing in their team (38%), evolving their offering, including introducing new products and services (31%) and introducing new technology (28%).

Overall, UK business confidence dipped two points in February to 42%, driven by softening confidence from firms in both their own trading prospects (49% vs 51% in January) and the wider economy (34% vs 37% in January).

However, companies’ hiring intentions increased to the highest level since May 2022, with 36% of firms intending to increase staff levels over the next 12 months – up three points on the month before. 

Scotland was the most confident part of the UK in February (56% vs 42% in January), followed by the North East (54% vs 62%) and the East Midlands (52% vs 38%). 

There was a mixed picture for sectors this month. Confidence fell in manufacturing (nine points to 40%) and construction (seven points to 38%) respectively, although results remain higher than the same time last year.

In contrast, the dominant services sector was unchanged compared to January at 45%, exceeding all months of 2023 except for November. Retail confidence was broadly steady, dipping one point to 41%. 

Becci Wicks, regional director for the South East at Lloyds Bank Commercial Banking, said: “It’s incredibly positive to see confidence continue to climb for businesses in the South East, and particularly such strong optimism in their own trading prospects and such widespread hiring plans.  

“As firms prepare for future growth, it’s essential that they keep tight control over their working capital.

“In what are improving, but still volatile, economic conditions, a strong focus here will help ensure that they have the firepower to quickly capitalise on new opportunities as they arise – as well as the flexibility and resilience to weather any sudden downturns.”

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