British business confidence has rebounded significantly since the Brexit referendum, bouncing back to reach an 18-month high, according to a new report from Lloyds Bank.
Its confidence index, which represents respondents’ expected sales, orders and profits over the next six months and looks primarily at small- and medium-sized businesses, fell to 12 per cent following the vote, but has since increased to 24 per cent.
This is in line with the long-term average of 23 per cent, the report’s authors said.
The share of firms that named political uncertainty and weaker UK demand as potential threats edged higher to 11 per cent and 18 per cent respectively, but were little changed from a year ago.
However, the percentage of companies having difficulty recruiting skilled labour in the last six months increased to a ten-year high of 52 per cent, up from 31 per cent back in January. The number of firms having trouble recruiting unskilled labour also rose from 14 per cent to 26 per cent.
But the number of businesses expecting to raise their staffing levels in the next six months increased by six points since January to eight per cent, while the number expecting to increase their average pay in the next six months increased from 12 per cent to 16 per cent.
“Our latest survey, which was conducted during the election campaign, shows an increase in business confidence since our last report at the start of the year,” said Tim Hinton, managing director for mid markets and SME banking at Lloyds Banking Group. “Although challenges remain in recruiting both skilled and unskilled labour, businesses are anticipating higher sales, increased profits and staffing levels to rise, which is all very positive for the economy.
“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. 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.”