Business confidence in the South East fell 14 points during April to 36%, according to the latest Business Barometer from Lloyds.
Companies in the South East reported lower confidence in their own business prospects month-on-month, down 18 points at 48%.
Taken together with firms’ optimism in the wider economy, which fell 10 points to 25%, this gives a headline confidence reading of 36% (vs 50% in March).
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 (36%), investing in their team, for example, through training (35%) and entering new markets (32%).
The Business Barometer, which surveys 1,200 businesses monthly and has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Overall, UK business confidence fell 10 points in April to 39%. Firms’ optimism in their own trading prospects dropped seven points to 50% while their confidence in the wider economy fell 13 points to 28%.
The North East was the most confident UK nation or region in April (59%), followed by the West Midlands (53%) and the North West (52%).
Confidence fell across the four broad sectors. Manufacturing confidence remained broadly unchanged from last month, falling by one point to 38%, while the construction sector saw the largest decrease in business confidence this month, declining 22 points to 26%.
Retail confidence also fell by 13 points down to 45% and the service industry fell seven points to 40%, both now at three-month lows.
Amanda Dorel, regional director for the South East at Lloyds, said: “While confidence has eased this month, it’s encouraging to see South East businesses continuing to set out plans for new growth – whether that’s by evolving their products and services, developing their teams, or exploring new markets. We’ll continue to support businesses as they put their ambitions into action.”
Hann-Ju Ho, senior economist, Lloyds Commercial Banking, added: “With the announcement of global tariffs from the United States on 2 April and the market volatility that followed, it is unsurprising that business confidence saw an impact this month.
“However, economic optimism remains higher than at the beginning of the year, showing businesses’ resilience in the face of recent challenges, and overall confidence is still well above the long-term average of 29%, an average taken from over 20 years of analysis.”
