UK business confidence fell in June by three points to 44 per cent, below the 12-month average of 47 per cent, the Lloyds Business Barometer found.
Optimism in the wider economy fell by four points to 31 per cent in June, below the 12-month average of 38 per cent.
Domestic firms reported lower confidence in both their economic optimism and trading outlook, while firms trading globally were more confident.
Domestic firms reported lower confidence in both their economic optimism and trading outlook, citing cost pressures (up by 2 points) and global uncertainty (up by 7 points) as factors affecting economic optimism. Firms that trade internationally were more confident in both their economic optimism and trading outlook.
Optimism in the wider economy fell by four points to 31 per cent in June, below the 12-month average of 38 per cent. In June, 55 per cent said they were optimistic (no change from May), while those who felt more pessimistic increased by four points to 24 per cent.
The main factors cited by firms for this drop remained consistent with previous months, with rising inflation and cost pressures up by three points, and continuing global uncertainty up by four points, a release from the Lloyds Banking Group said.
Businesses’ own trading outlook decreased by two points in June to 56 per cent, compared to a 12-month average of 57 per cent. Sixty-four per cent of firms (down by two points from May) expect stronger output over the year ahead, while the share expecting weaker activity remained unchanged at 8 per cent.
Among firms expecting weaker activity, the main factors remained consistent with May and April: economic uncertainty, and continuing cost pressures.
Domestic firms reported lower confidence in both their economic optimism and trading outlook. Their economic optimism fell by 21 points to 3 per cent, an 18-month low and significantly below the 12-month average of 20 per cent.
This was driven by expected weaker trading activity and higher cost pressures. Their trading outlook fell by 11 points to 37 per cent, compared to a 12-month average of 42 per cent. Firms cited cost pressures, global uncertainty, and tighter financial conditions as factors affecting confidence in the wider economy.
By contrast, firms that trade internationally were more confident in both their economic optimism and trading outlook. Their optimism in the wider economy increased by eight points to 47 per cent, compared to a 12-month average of 49 per cent. This was driven by stronger customer demand, as well as improved financial conditions.
Their positive trading outlook rose by five points to 68 per cent compared to a 12-month average of 65 per cent. This was driven by increased investment plans, improved supply chain conditions and stronger customer demand.
Hiring intentions for the year ahead rose for the first time in three months. The share of firms planning to increase their workforce increased by two points to 55 per cent, while those anticipating headcount reductions fell three points to 14 per cent. Firms intending to hire cited the need to meet strengthening demand and expand capacity.
The number of UK businesses open to investment opportunities dropped by three points to 34 per cent, compared to 12-month average of 35 per cent. Most continue to cite training (41 per cent), technology (39 per cent) and artificial intelligence (31 per cent) as their priority areas.
Business confidence amongst manufacturing firms in the United Kingdom dropped by 10 points to 33 per cent compared to a 12-month average of 46 per cent. This was driven by a 16-point decrease in economic optimism with firms pointing to global uncertainty, higher costs and tighter financial conditions.
Retail firms recorded an eight point drop in confidence to 45 per cent compared to a 12-month average of 49 per cent. This was mainly driven a 12 point decrease in economic optimism with firms pointing to by global uncertainty, higher costs and tighter financial conditions.
Fibre2Fashion News Desk (DS)
