Lloyds Bank has issued a promising update to UK businesses, reporting that the trading outlook rose by four points to 58% in May. The bank, which has branches in Birmingham, found confidence in the wider economy rose two points to 35%.
Business Confidence Rises
Business confidence increased in seven out of 12 regions and nations. The construction sector saw the biggest rebound in confidence, increasing 15 points to 44%. Overall business confidence edged upwards by three points to 47% in May, according to the latest Lloyds Business Barometer, indicating tentative stabilisation after the decline seen in April.
The 12-month average for overall confidence is currently sitting at 48% and trending above the long-term average of 30% since the survey began in 2002.
Economic Outlook
Confidence in the wider economy saw a small rise in May, up two points to 35%, which compares to a 12-month average of 39%. Of those surveyed, 55% said they were optimistic about the wider economy, and 20% were more pessimistic.
The top drivers of negative sentiment in May were rising inflation and cost pressures, and global uncertainty. There was a month-on-month fall in concerns about higher interest rates.
Industry Commentary
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Business confidence edged up modestly in May, suggesting firms are beginning to steady after April’s decline. This month, confidence levels from businesses in the North East particularly stand out. It's also reassuring to see that increased confidence from the construction sector has brought them more in line with their retail, services and manufacturing counterparts.”
“Across the UK, each region and nation presents unique opportunities and drivers of growth - whether that’s clean energy in the North East, advanced manufacturing in the West Midlands or tourism and hospitality in Scotland. We've seen first-hand what the right financial support and advice can do for ambitious businesses and are keen to continue supporting our customers as they grow - helping Britain prosper.”
