RE: Business confidence at 15-month low as cost of living squeeze intensifies30 Jun 2022 09:04
Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said:
“Business confidence declined this month, suggesting that the momentum for growth is moderating. Firms remain broadly positive but face several challenges ahead, including concerns around higher costs and slowing demand. If these trends continue, businesses may have less scope to pass on higher costs to support their margins.”
Regional and sector insights
The East of England was the only region to see an increase in business confidence this month, up 17 points to 31%. The rise in confidence reaffirms the recent trend in the East of England to be above the national average. The strongest region was the North West at 42% (down 2 points) with a modest fall in confidence. The biggest regional falls in business confidence were in London (down 28 points, to 35%) and the West Midlands (down 23 points to 30%).
In Scotland, there was a decrease of 15 points (to 27%), with the North East and Yorkshire & Humber falling eight and seven points respectively, settling around the UK average of 28%. The remainder of the UK regions - East Midlands, Wales, Northern Ireland, the South East and the South West - saw decreases, each falling below the national average.
Confidence among businesses in the manufacturing and construction sectors fell, bringing them close to the UK all-sector average, at 32% and 30% respectively, reflecting lower optimism in the economy. Service sector confidence declined to its lowest in a year, at 25%, showing weaknesses in hospitality, though offset by stronger confidence in business services. Confidence in retail businesses edged up this month four points from 27% to 31%.
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