Overall business confidence fell to 17% in August, its lowest level since August 2016, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
The share of firms reporting higher business confidence decreased by 7 points to 38% and those reporting lower confidence increased by 6 points to 21%. Meanwhile, economic optimism fell by 12 points from 17% to 5%, the lowest level since June 2016 and the second lowest level since 2012.
The net balance of firms expecting to raise their headcount over the coming year increased by 2 points to 27%. The share of firms expecting to increase their headcount remained the same at 33%, while 6% expect to reduce staffing levels, down by 2 points from last month.
The net balance of firms indicating an improvement in their own business prospects decreased by 14 points to 29% in August.
Meanwhile, sentiment in the industrial sector, covering manufacturing and construction, fell to a three-month low of 10%. Consumer services confidence also dropped to a 14-month low of 3%. In contrast, overall confidence in business and other services rose by 5 points to 29%.
"The August report shows that overall business confidence has fallen to the lowest level for 12 months, with sentiment weakest among consumer-facing firms,” Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said. While confidence overall is now just under the long term average, firms’ hiring plans remain robust."
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