By Daniel Hunter
Overall business confidence remains strong and stable, underpinned by companies’ expectations of an improvement in exports as well as an anticipated increase in investment levels, according to the latest Business in Britain report from Lloyds Bank.
The twice-yearly report, now in its 23rd year, gathers the views of 1,500 UK companies, predominantly small to medium sized businesses, and tracks the overall “balance” of opinion on a range of important performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.
Overall business confidence holds steady at strong level
The report’s overall key confidence index which looks at businesses sentiment over the coming six months, has remained stable at 43% compared with January 2015. Although the latest reading is down from the survey’s high of 53% 12 months ago, it remains well above the long-term average reading of 23%. Expectations of employment growth and a resurgent export market suggest strong economic prospects for the second half of the year.
Looking ahead, 29% of firms said that weaker UK demand poses the greatest threat to their business in the next six months which could explain why firms expect to increase their sales in global markets.
The net balance of exporters expecting an increase in total exports across the globe has risen by five points to 46%, boosted by firms’ intentions to export to growing regions such as the Middle East and Africa.
In particular the increase in total exports has been driven by the number of exporters expecting an increase in trade with Europe in the next six months — the net balance has grown by eight points to 30% showing a resurgence in EU trade.
Tim Hinton, Managing Director, Mid Markets and SME Banking, Lloyds Banking Group said: “Business confidence has remained relatively strong with encouraging expectations for sales, orders and profits for the rest of the year. This has been underlined by a bounce back in exports to Europe as well as companies' intentions to grow their presence further on the international stage.”