The survey – a monthly snapshot of company views on the outlook for the economy – shows that UK businesses are dramatically more confident in their hopes for the wider economy than at the end of last year, and are steadily regaining faith in their own trading prospects.
Two thirds of businesses (65%) say they are now more optimistic about the overall economy than they were three months ago, while only one in ten (10%) are less hopeful. The resulting balance of 55% is a significant rise of 18% on January’s balance (37%).
This renewed confidence in the wider economy is also helping to boost businesses’ optimism about their own trading prospects. The survey shows that the balance of firms expecting business activity to improve over the coming 12 months is up 2%, to 46% – higher than the long term average of 41%.
By far the biggest improvement in confidence was in the industrial sector, where the balance of firms expecting increased business activity rose 11%, and the balance of firms saying they are more optimistic about the economy increased by 44%. This marked improvement may have been fuelled by renewed hopes for exports across the sector as a result of the weaker pound and the rapid recovery in global trade volumes.
Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: “Renewed hope for exports is just the tonic businesses needed. For many UK firms involved in exporting it has provided a welcome confidence boost – and that’s why we’ve seen such a sharp rise in overall company views about the economic outlook.
“It is also important to look at the views businesses have of their own prospects – and its clear that, while confidence is on the rise, the mood is still very much one of cautious optimism.”