Lloyds Bank Business in Britain survey, now in its 25th anniversary year, offers insights on the recent performance and expectations of domestic businesses. The survey is based on the responses of 1,500 firms, especially small and medium-sized companies, drawn from all industries and all parts of the country.
According to the latest report, overall business confidence – a metric based on firms’ expectations of stronger sales, orders and profits in the next six months – rose to 14%.
This is a slight rise from 12% recorded by the previous survey conducted shortly after the EU referendum outcome – view the September 2016 Business in Britain Report. Whilst it indicates confidence has stabilised, it nevertheless remains below the long-term average and points to a possible slowdown of economic growth in the first half of 2017.
Expected sale and profits stabilise
The net balance of firms reporting expectations of higher turnover/sales in the next six months increased marginally to 17% from 16%. It remains in positive territory, but is nevertheless the second lowest reading since 2011.
Expected exports improve, helped by the fall in the pound
The news for export prospects was more positive. The net balance of firms anticipating stronger export sales in the next six months increased to 26% from 20%. Firms indicated that the exchange rate is the most favourable for their export sales since the last sharp depreciation during the global financial crisis.
Firms’ pricing intentions point to rising inflationary pressures
The weaker pound has also contributed to a rise in firms’ pricing intentions. The net balance of firms expecting to raise their prices in the coming six months increased to 20% from 13% and is particularly high among importing firms (28%).
Expected staffing levels improve marginally
The net balance of firms reporting expectations of higher staffing levels in the next six months improved only slightly, rising back to positive territory to 2% from 1%. It remains consistent with a moderation in the pace of employment growth.
For a full analysis, alongside a sectoral and regional view, download the Business in Britain report here.
You can view the press release from here