Business confidence in the South East rose 16 points during February to 38%, according to the latest Business Barometer from Lloyds.
Companies in the region reported higher confidence in their own business prospects month-on-month, up nine points at 48%. When taken alongside their optimism in the economy, up 24 points to 28%, this gives a headline confidence reading of 38% (vs 22% in January).
A net balance of 30% of businesses in the region also expect to increase staff levels over the next year, up three 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, for example by introducing new products or services (39%) and introducing new technology, such as AI or automation (38%).
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 was unchanged since January at 44%. Firms’ confidence in their own trading prospects fell six points to 53%, but their optimism in the wider economy rose eight points to 36%.
London was the most confident UK nation or region in February (59%), followed by the North West (58%) and Northern Ireland (58%).
The construction sector saw strong gains in overall confidence. In February, confidence was up 14 points to 60%, with manufacturing also seeing a boost, up five points to 37%. Confidence for retail and service sector firms softened slightly, each down two and three points respectively.
Amanda Dorel, regional director for the South East at Lloyds, said: “It’s encouraging to see South East confidence rise again this month. Local firms are continuing to press ahead with their growth plans, and we’ll be ready to help with our support.”
Hann-Ju Ho, senior economist, Lloyds Commercial Banking, added: “It’s encouraging to see optimism in the wider economy returning, although with a small reduction in firms’ confidence in their own trading prospects.
“The majority of the survey results were collected following the Bank of England’s close decision to hold interest rates at its February meeting, signalling potential easing ahead, which may have alleviated business concerns, including those around cost pressures.
“While the rise in pricing expectations to a six-month high may indicate firms are looking to rebuild their margins in 2026.
“It’s also great to see confidence increase for manufacturers and construction firms as they are key for UK growth.”
