Latest research has shown overall business confidence in June rose for the third time in four months, increasing by 3 points to 13%.
The Lloyds Bank Commercial Banking Business Barometer revealed that the net balance of firms reporting stronger trading prospects increased by 5 points to 22%, while economic optimism edged up 3 points to 5%.
Of those surveyed, 32% of firms said they expect to increase their headcount in the year ahead (down 1 point from 33%), while an unchanged 21% predicted it would shrink.
Looking at the expected impact of Brexit, trading prospects improved slightly, although the net balance remained negative at -19% compared with -21% in May.
A fifth of businesses (20% up from 19%) believe leaving the EU will have a positive impact while well over a third (39% down from 40%) say it will have a negative impact.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said, “While overall business confidence is still below the long-term average, it is encouraging to see a rise for the third time in four months since the low in February.
“Firms are showing more optimism both in their trading prospects and the overall economy, with levels rising in the retail, construction and services sectors this month. Ongoing global trade tensions, however, appear to have weighed on manufacturing confidence.”
Paul Gordon, Managing Director for SME and Mid Corporates, Lloyds Bank Commercial Banking, added, “Ongoing political uncertainty unsurprisingly leaves firms’ assessment of the expected impact of the UK leaving the EU largely negative. In the face of this, it’s perhaps even more encouraging to see improvements in business confidence in a number of business sectors this month and across the majority of regions.
“We know SMEs and mid-sized companies are continuing to do their best to withstand this turbulence, but we anticipate confidence will continue to fluctuate in the months ahead.”
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