South East businesses joint most confident in May

Business confidence in the South East was the joint highest of any UK region or nation in May, 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 21 points at 62% – the highest recorded for any UK region or nation in May.  

When taken alongside their optimism in the economy, up 16 points to 52%, this gives a headline confidence reading of 57% (vs. 38% in April) – the joint highest overall confidence reading on the Business Barometer in May, alongside Scotland (also 57%). 

A net balance of 32% of businesses in the region also expect to increase staff levels over the next year, up 10 points on last month.  

Looking ahead to the next six months, South East businesses identified their top target areas for growth as entering new markets (44%), evolving their offering (43%) and investing in their team, for example, through training (37%). 

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. The data for this edition was collected between 1-16 May, before the UK general election was announced. 

In May, overall UK business confidence reached its highest level since 2015 – rising by eight points to a net balance of 50%.   

Businesses showed increased optimism in both their trading prospects (up nine points month-on-month to 54%) and the economy (up seven points to 46%). Firms’ trading outlook was the most optimistic in seven years, while economic optimism was the highest recorded since September 2021.  

The West Midlands (56%) followed the South East and Scotland as the second-most confident UK nation or region in May.  

Similarly, there were particularly strong results reported in the construction and services sectors this month. Prospects in the construction sector jumped to 58% (up 20 points), the highest for 14 months, while in services, expected output increased to 57% (up 12 points).

On the latter, it is the highest level since the survey was expanded in 2018. Expected business activity in the retail sector also improved to 49% (up three points).  

Although trading prospects in manufacturing eased slightly to 49% (down three points), the underlying trend over the last three months remains positive. 

Becci Wicks, regional director for the South East at Lloyds Bank Commercial Banking, said: “Such a positive outlook from the South East’s businesses – particularly when it comes to firms’ own trading prospects – is a reflection of our region’s inherent creativity, resilience and ambition. 

“The focus now will be on translating this confidence into further growth. It’s clear that many firms already have plans in place – from launching new products to exploring new markets.

“As they put these into action, we’ll continue to be by their side every step of the way – providing the resources, insight and support they may need to turn optimism into output.”

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