Business confidence in the South East fell one point during September to 47%, 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 seven points at 57%.
When taken alongside their optimism in the economy, down 10 points to 36%, this gives a headline confidence reading of 47% (vs 48% in August).
Despite an increase of confidence in firms’ own trading prospects, a net balance of just 36% of businesses in the region expect to increase staff levels over the next year, down eight points on last month.
Looking ahead to the next six months, South East businesses identified their top target areas for growth as evolving their offering, for example, by introducing new products or services (37%), investing in their team, for example, by investing in training (33%) and introducing new technology, for example through AI, automation and digitalisation (28%).
Overall UK business confidence in September dipped slightly to 47%, down from August’s 50%.
Though there was a marginal increase in their own trading prospects (up two points month-on-month to 54%), firms’ confidence in the overall economy dropped nine points to 38%.
The joint-most confident regions in the UK were the West Midlands and London, both reporting overall confidence of 59%. Only Northern Ireland, Wales, London, the South West and North West reported an increase in overall confidence.
Projections for output were mixed across the sectors, with some showing significant changes from previous results. In construction, the sharp increase last month was largely counteracted by a drop in expectations in September, falling by 12 points to 46%.
Similarly, in manufacturing, trading prospects fell for a second month to 53%, although this figure is still stronger than the year-on-year figure.
However, the falls in the manufacturing and construction sectors were more than offset by a small rise in retail and a bigger rise in the dominant service sector.
Amanda Dorel, regional director for the South East at Lloyds Bank Commercial Banking, said: “Business confidence in the South East dipped slightly this month but was buoyed by firms’ confidence in their own prospects. It’s encouraging to see firms in the region looking at new prospects for growth, with plans to introduce new products and services, as well as investing in new technologies.
“The South East is a UK hub for technological innovation, with more than 8,000 tech companies currently based in Oxford and Cambridge alone.
“It’s not surprising then that firms are looking to introduce new technology such as AI, automation and digitalisation, and we’ll be on hand to support with funding and offer advice and solutions to help them deliver on these ambitions.”
