The overall rise in business confidence helped to reverse half of October’s 10-point drop and was led by stronger economic optimism, finds a new report.
The latest Business Barometer from Lloyds Bank Commercial Banking also revealed that the net balance of firms reporting higher economic optimism increased by nine points to 17%, and businesses expecting stronger trading prospects also rose by two points to 31%, resulting in an overall increase in business confidence.
However, continued uncertainty about the outcome of Brexit negotiations and the details of a deal is still having a negative impact on business confidence.
For example, although almost a third (30%) of firms said that Brexit is expected to have a positive impact on their business (up from 27% last month), 36% of businesses said they think Brexit would have a negative impact, resulting in a net balance of ‑6%, compared with ‑7% in October and +9% in September.
Interestingly, concerns about the impact of leaving the EU were the highest in manufacturing (-15%) and other services such as business/financial services and health/education (-16%).
Paul Gordon, Managing Director, SME and Mid Corporates, Lloyds Bank Commercial Banking, commented, “The tide seems to have turned this month with overall business confidence up by five points from last month, painting a more positive picture.
“This is particularly true for businesses in Yorkshire and the Humber and Wales, seeing the biggest increase, with confidence rising by 26 points to 43% and 23 points to 30% respectively.
“Businesses in the manufacturing and the construction sector have responded the most positively to the increase in economic confidence, with the retail sector making marginal gains too.
“Whilst it remains to be seen whether this positivity will be sustained, it’s nevertheless promising to see a more optimistic picture for this month.”
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