British small businesses poised for growth as confidence hits five year high
15 July 2013
Lloyds TSB Commercial Banking Business in Britain survey shows growing confidence in wider economy despite concerns over Eurozone
- Business confidence has reached its strongest level since January 2008, reflecting rising expectations for orders, sales and profits in the next six months
- Companies are more optimistic about the economy than they have been since the end of the recession in 2009
- Businesses have signalled that they intend to invest in hiring and capital expenditure over the next six months
- There are tentative signs that inflationary pressures appear to be falling as a smaller proportion of companies are planning to increase prices
- Businesses are less upbeat about eurozone export prospects, although they remain optimistic about trade with the rest of the world
- Confidence has increased across all regions and sectors in the UK, in particular the construction and manufacturing sectors, which hint at a longed-for rebalancing of the UK economy
Business confidence is at a five year high, having reached its strongest level since January 2008 fuelling hopes of a continued uplift in activity during the second half of 2013, according to the latest Business in Britain report from Lloyds TSB Commercial Banking.
The twice yearly report, now in its 21st year, canvasses the views of nearly 1,800 UK businesses and shows that firms continue to grow in confidence, driven by expectations of stronger profits, orders and sales over the next six months.
The survey’s key Business Confidence Index tracks businesses’ views of likely sales, orders and profits for the coming six months and presents the overall “balance” of opinion, weighing up the percentage of firms that are positive in outlook against those that are negative.
In this latest report, the confidence index has increased by 11 points to 30 per cent, from 19 per cent in the previous survey at the start of 2013. The index has risen above the long-term average of 21 per cent for the first time since the beginning of the global financial crisis in 2008.
David Oldfield, Managing Director, SME and Mid Markets Banking, Lloyds Banking Group said:
“Businesses are clearly beginning to regain confidence about future trading prospects, after years of hesitation and concern, and we hope this renewed optimism will lead to growth for the UK economy.”