Business confidence in the South East slipped only marginally in August, dipping by a single point to 43% according to the latest Business Barometer from Lloyds, which draws on the views of 1,200 firms each month. The headline figure, while lower than July’s reading, conceals a more nuanced story about how companies in the region view their prospects and the wider economic climate.
On one hand, firms are increasingly upbeat about their own outlook. Confidence in their business performance rose seven points to 56%, suggesting that many believe they are well-placed to navigate current challenges. Yet when the focus shifts to the broader economy, the mood darkens: optimism in the national picture has dropped nine points to 30%. The balance of these two views leaves business confidence in the South East fractionally below where it stood in the previous month.
Hiring intentions, however, paint a brighter picture. A net balance of 44% of companies in the region expect to expand their teams over the next year—an encouraging 13-point rise on July’s figures. It appears that despite reservations about the economy at large, many employers are ready to invest in people and strengthen their workforces for the future.
Amanda Dorel, regional director for the South East at Lloyds, reflected on this trend with cautious optimism. “It’s particularly encouraging to see South East firms strengthening their hiring intentions for the year ahead. The region’s businesses are focused on building for the future, whether through team development, product innovation or technological advancement. We’ll continue to provide our tailored support to help them achieve their goals.”
The sense of forward momentum is further underlined by the ambitions firms have set for the months ahead. Forty-two percent say they plan to evolve their offering, for example by introducing new products or services. Thirty-nine percent are looking outward, hoping to enter new markets. A further 35% are intent on advancing through technology, with artificial intelligence and automation featuring prominently in their plans. Even in an environment marked by caution, these figures point towards a willingness to innovate and adapt.
Nationally, the picture looks somewhat brighter. UK business confidence as a whole rose by two points in August to 54%. While confidence in the economy dropped three points to 44%, belief in individual trading prospects climbed five points to 63%. Regional differences were striking: London led the way with confidence soaring to 69%, closely followed by the East of England at 64%.
Sector performance has also been uneven. Manufacturing firms saw confidence surge by 14 points to 62%, reaching levels not recorded since 2015. Retailers, too, had reason for cheer as their confidence rose 13 points to 57%, the highest in five months. Yet the picture was less positive elsewhere. Construction businesses reported a five-point fall to 40%, their weakest reading in four months, while service sector confidence slipped eight points to 53%.
Taken together, these results suggest that while business confidence in the South East has eased back slightly, firms remain far from despondent. The willingness to hire, the appetite for innovation, and the pursuit of new markets all point towards a regional economy that is cautious but determined. Set against a national backdrop of mixed fortunes, the South East’s story is one of resilience: an acknowledgement of the hurdles ahead, tempered by a readiness to seize the opportunities that come with them.
