Business confidence in the South East fell 12 points during January to 22%, 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 five points at 39%. When taken alongside their optimism in the economy, down 20 points to 4%, this gives a headline confidence reading of 22% (vs 34% in December 2025).
A net balance of 27% of businesses in the region also expect to increase staff levels over the next year, up four 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 by investing in training (49%), entering new markets (42%) and evolving their offering, for example by introducing new products or services (42%).
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 fell three points in January to 44%. While firms’ confidence in their own trading prospects rose seven points to 59%, their optimism in the wider economy fell 14 points to 28%.
London was the most confident UK nation or region in January (68%), followed by Northern Ireland (66%) and the West Midlands (65%).
Retail sentiment increased marginally in January, up two points to 49%, while confidence in the service sector rose slightly, up one point to 42%, the first increase since the summer. Confidence fell in the construction sector following a particularly strong increase in December.
Amanda Dorel, regional director for the South East, said: “Despite a dip in confidence this month, we know many businesses remain focused on their 2026 plans – whether that’s investing in their teams through training, exploring new markets, or developing their product and service offerings.
“With more than a quarter of firms still planning to increase headcount, there’s clear determination to build resilience and position for growth in the year ahead.”
