NEWS

Business Confidence Reaches 18-Month High!

  • June 27, 2017
 

Overall business confidence in the UK increased to 24% in June, up from 12% immediately following the EU referendum vote last year. This is an 18-month high, according to the latest ‘Business in Britain’ report from Lloyds Bank.

The report, which was based on data collected after the snap election was called, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses. It also finds that despite the 18-month high in business confidence, there are difficulties in recruiting skilled labour. The net balance of companies who said that they had experienced difficulty in recruiting skilled labour in the last six months increased to a ten-year high of 52%, compared with 31% in January. The share of firms reporting challenges in recruiting unskilled labour also rose to 26% from 14% in the same period.

In a separate report from the British Chambers of Commerce, UK GDP growth forecast was upgraded for 2017 from 1.4% to 1.5%. Its expectations for growth in 2018 and 2019 remain unchanged at 1.3% and 1.5% respectively.

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Overall business confidence in the UK increased to 24% in June, up from 12% immediately following the EU referendum vote last year. This is an 18-month high, according to the latest ‘Business in Britain’ report from Lloyds Bank.

The report, which was based on data collected after the snap election was called, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses. It also finds that despite the 18-month high in business confidence, there are difficulties in recruiting skilled labour.

The net balance of companies who said that they had experienced difficulty in recruiting skilled labour in the last six months increased to a ten-year high of 52%, compared with 31% in January. The share of firms reporting challenges in recruiting unskilled labour also rose to 26% from 14% in the same period.

Despite recruiting challenges, the net balance of firms expecting to raise their staffing levels in the next six months increased since January by six points to 8% while expectations of higher average pay in the next six months rose to 16% from 12%, suggesting that companies are taking a cautious approach to hiring and pay.

"With details of the terms of Britain's exit from the EU still to come, inflation on the rise and general volatility and uncertainty in the economy, the outlook remains mixed at best,” Tim Hinton, Managing Director, Mid Markets and SME Banking, Lloyds Banking Group said. “However businesses have been operating in this environment for some time now and they are taking it in their stride, staying focused on what they can control and on their business."

In a separate report from the British Chambers of Commerce, UK GDP growth forecast was upgraded for 2017 from 1.4% to 1.5%. Its expectations for growth in 2018 and 2019 remain unchanged at 1.3% and 1.5% respectively.

The report stated that with inflation rising and average earnings growth expected to hold steady, wage growth in real terms is expected to remain negative over the next few years. As a consequence, consumer spending, a key driver of UK growth, is forecast to remain persistently weak over the next few years.

Overall business confidence in the UK increased to 24% in June, up from 12% immediately following the EU referendum vote last year. This is an 18-month high, according to the latest ‘Business in Britain’ report from Lloyds Bank.

The report, which was based on data collected after the snap election was called, gathers the views of more than 1,500 UK companies, predominantly small to medium sized businesses. It also finds that despite the 18-month high in business confidence, there are difficulties in recruiting skilled labour.

The net balance of companies who said that they had experienced difficulty in recruiting skilled labour in the last six months increased to a ten-year high of 52%, compared with 31% in January. The share of firms reporting challenges in recruiting unskilled labour also rose to 26% from 14% in the same period.

Despite recruiting challenges, the net balance of firms expecting to raise their staffing levels in the next six months increased since January by six points to 8% while expectations of higher average pay in the next six months rose to 16% from 12%, suggesting that companies are taking a cautious approach to hiring and pay.

"With details of the terms of Britain's exit from the EU still to come, inflation on the rise and general volatility and uncertainty in the economy, the outlook remains mixed at best,” Tim Hinton, Managing Director, Mid Markets and SME Banking, Lloyds Banking Group said. “However businesses have been operating in this environment for some time now and they are taking it in their stride, staying focused on what they can control and on their business."

In a separate report from the British Chambers of Commerce, UK GDP growth forecast was upgraded for 2017 from 1.4% to 1.5%. Its expectations for growth in 2018 and 2019 remain unchanged at 1.3% and 1.5% respectively.

The report stated that with inflation rising and average earnings growth expected to hold steady, wage growth in real terms is expected to remain negative over the next few years. As a consequence, consumer spending, a key driver of UK growth, is forecast to remain persistently weak over the next few years. 

 

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