Economic outlook likely to 'remain strong' for UK firms

The vast majority of British businesses remain confident of growing sales, orders and profits during the second half of 2015, with economic activity set to ‘remain strong’ amid an increase in investment spending and exports.

That’s according to the latest findings from Lloyds’ ‘Business in Britain’ report: a study of more than 1,500 small and medium-sized companies.

Almost half (43 per cent) of respondents reported business confidence for the next six months as ‘stable’, with SMEs based in the South East, South West and East Midlands significantly more optimistic about growing orders, profits and sales in the coming months.

Small firms in Wales experienced the greatest decline in business confidence: down 14 points to 32 per cent, while Scotland and London also experienced a marginal decline in confidence.

Those firms with ‘steady’ business confidence are matched by plans to increase investment spending, with more than three-quarters of SME owners surveyed planning to invest more capital into their business, particularly those in property (33 per cent) and hospitality and leisure (30 per cent).

Almost a third (30 per cent) of companies anticipate growing their exports across Europe, an increase of eight per cent from the latest report in January 2015.

However, only three per cent more businesses plan to export into growing regions such as Africa and the Middle East.

Tim Hinton, managing director, Lloyds’ mid markets and SME banking, said: “Business confidence … has been underlined by a bounce back in exports to Europe as well as companies’ intentions to grow their presence further on the international stage.

“Positively, businesses remain eager to invest in staff and infrastructure for the long term and while certain challenges remain on the horizon – such as uncertainty in the Eurozone, a potential interest rate rise and inflationary pressures – the overall outlook is strong for the UK, particularly in the construction and manufacturing sectors.

“Businesses have good reasons to remain confident as the long-term health of the UK continues to improve.”

Date published 7 Jul 2015 | Last updated 7 Jul 2015