UK Business Confidence “Remains Strong”
Strong economic activity to remain as increased sales, investment spend and exports predicted for the second half of 2015
Business confidence in the UK remains stable as companies predict a rise in sales, investment spending and overseas activity, according to Lloyd’s latest bi-annual Business in Britain report.
The study, in its 23rd year, featured over 1,500 UK companies and revealed that business confidence remains strong at 43% – nearly double the survey’s average of 23% – with firms in the East Midlands, South West and South East the most optimistic about growth.
London witnessed a marginal decline in business confidence, as did Scotland; but Wales has seen the biggest drop in confidence over the past six months – falling from 46% to 32%.
With regards to trade, the majority of businesses which currently exporting plan to increase their activity across the globe, with the net balance increasing from 41% to 46%.
The increase in exports includes increased trade in Europe (from 22% to 30%) and in growing markets such as Africa and the Middle East (both up 3 points from January 2015).
The report also found that UK companies plan to invest more capital back into their business, with businesses in property (33%) and leisure (30%) leading the way
Overall, only 24% of companies said they would not be investing capital with the majority of respondents preparing to invest up to £1m over the next six months and 8% planning to invest over a £1m.
Generally staffing levels appear to be static, with the level of businesses operating at full capacity at an all-time high of 47% and the number of firms planning to hire only dropping by 1% to 19%.
Lloyds’ mid markets and SME banking managing director, Tim Hinton, commented on the report:
“Business confidence […] 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.
“Positively, businesses remain eager to invest in staff and infrastructure for the long term and while certain challenges remain on the horizon – such as uncertainty in the Eurozone, a potential interest rate rise and inflationary pressures – the overall outlook is strong for the UK, particularly in the construction and manufacturing sectors.”
“Businesses have good reasons to remain confident as the long-term health of the UK continues to improve.”