Business confidence in the South East held steady during May at 36%, according to the latest Business Barometer from Lloyds.
While companies in the region reported lower confidence in their own business prospects month-on-month, down two points at 46%, their optimism in the economy rose one point to 26%. Taken together, this gives a headline confidence reading of 36%, unchanged from April (36%).
However, a net balance of 49% of businesses in the region expect to increase staff levels over the next year, up 18 points on last month.
Looking ahead to the next six months, South East businesses identified their top target areas for growth as investing in their team, for example through training (48%), evolving their offering, for example by introducing new products or services (41%), investing in sustainability (33%) and entering new markets (33%).
The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.
Overall UK business confidence increased 11 points in May to 50% – its highest level since August 2024.
Firms’ optimism in their own trading prospects strengthened six points to 56%, while their confidence in the wider economy also climbed 16 points to 44%.
The East Midlands was the most confident UK nation or region in May (66%), followed closely by the North East (65%).
Construction firms’ confidence rose to a nine-month high of 56%, while those in the service sector reported a one-year high of 54%. Manufacturing confidence also rose by two points to 40%. However, retail confidence fell by five points to 40%, the lowest level since January this year.
Amanda Dorel, regional director for the South East at Lloyds, said: “Steady business confidence in the South East is a reassuring sign of resilience in the face of evolving trading conditions.
“And it’s incredibly encouraging to see more businesses planning to hire – something that benefits whole communities, not just the employers themselves.
“As local firms press ahead with their growth strategies, we remain committed to helping them translate their ambitions into results.”
