Business confidence hits 10-month high in the UK – here’s what it means for hiring
Business confidence saw a small rise in June, up one point to 51%, according to the latest Lloyds Business Barometer published on Monday 30 June.
This follows the 11-point rise seen in May, offsetting April’s 10-point decline. This rise was driven by economic optimism reaching a 10-month high (up one point) following the 16-point increase seen in May, the group said.
What it means for hiring
Businesses’ hiring intentions for the next 12 months increased for the second consecutive month, with 60% of firms expecting higher staffing levels in the coming year.
Just 15% anticipate a reduction in employee numbers, pushing the net balance up five points to 45%. Wage growth expectations also rose for the second month in a row, with 36% forecasting average pay increases of 3% or more, a four-month high.
Businesses’ price expectations declined again in June, by two points to 61%, following the five-point fall in May. This has left pricing expectations at a three-month low, although from a long-term perspective, this level of pricing expectations is still high and above the long-term average of 44%.
“Business confidence has continued its positive momentum, following the significant gains we saw in May,” said Hann-Ju Ho (Senior Economist at Lloyds Commercial Banking).
“In particular, the sustained rise in hiring intentions suggests that while firms do still face challenges, they may be starting to look beyond short-term staffing needs and preparing for future growth,” Ho said.
Some sectors are more confident than others
Business confidence in the manufacturing and retail sectors saw the most significant gains this month, with 12-point rises in both sectors to 52%. For manufacturing, this demonstrates an 11-month high. Construction and services, however, saw decreases in confidence, with falls by five points and four points respectively.
While confidence in the regions and nations remains above the long-term average (29%), only half saw a rise in confidence in June. Wales saw significant gains, up 31 points, and London also saw a large increase of 11 points.
Other regions saw more marginal gains, including East of England, South West, North West and South East. Confidence fell in the remaining regions, with the West Midlands falling the most, with a decrease of 20 points.
