Lloyds survey shows business confidence slumped in May – but consumers are feeling brighter

UK households' real disposable income has fallen, according to the ONS.
Picture: James Bass

UK households' real disposable income has fallen, according to the ONS. Picture: James Bass - Credit: Eastern Daily Press � 2013

Confidence among British businesses has slumped to an eight-month low in May as firms worry over their prospects, according to a survey.

The latest Lloyds Bank Business Barometer showed overall business confidence plunged to its lowest level since last September, with a net balance of 27% marking a sharp reversal of the 17-month high of 47% seen in April.

The drop came amid growing fears over outlook, with a steep decline in firms expecting stronger business prospects – plunging to 39% from 61% in April.

The report, which surveyed around 200 UK firms with turnover above £1m, also showed that 13% now expect weaker prospects, up from just 1% last month.

However the latest GfK Consumer Confidence Index has revealed different sentiments among the public after it increased by two points in May to minus five, despite inflation dealing a blow to household spending.


You may also want to watch:


Lloyds' survey showed industrial companies were the most gloomy, with sentiment plunging to a net balance of 6% from 56% in April.

These concerns look set to hit recruitment, with a net balance of 19% of firms expecting to expand their workforces over the coming year, down from 37% in April.

Most Read

But the survey showed optimism over the wider economy remains fairly robust, with a net balance of 28% down only moderately on the 34% recorded last month and remaining above the long-term average.

This comes despite official figures showing growth nearly stalled at 0.2% in the first quarter.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: 'Although we have seen a drop in overall business confidence from last month's elevated level, it is only slightly below the long-term average.

'The June survey will provide a more complete picture for the quarter, but the results from our survey so far still point to a pick-up in growth after the 0.2% out-turn in the first quarter.'

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter
Comments powered by Disqus