Lloyds survey shows business confidence slumped in May – but consumers are feeling brighter
- 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.
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.
- 1 Blaze sees 20 passengers evacuated from city bus
- 2 First-time publicans transform their local and are already winning awards
- 3 'Significant construction' on A47 to begin in 2023
- 4 Parked cars prevent buses from serving north Norfolk village
- 5 All of the Norfolk streets that won the Postcode Lottery in June
- 6 John Bailey: Lord Botham, our cricketing angler/conservationist
- 7 Buses damaged in city centre collision
- 8 Vehicles worth £50k stolen from Royal Norfolk Show
- 9 Farmers could be paid to leave fields fallow to end homes limbo
- 10 New pub landlord welcomes back families and introduces street food menu
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.'