Business confidence rebounds to 18-month high despite decade's most difficult recruitment environment

Jasper Jolly
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Businesses have seemingly shrugged off the Brexit vote (Source: Getty)

Business confidence has rebounded to its strongest level in 18 months in year since the UK voted to leave the EU despite the most difficult recruitment situation for a decade, according to a long-running survey.

Confidence among small and medium-sized firms returned to above its long-term average, according to an index compiled by Lloyds Bank.

The measure, based on sales and profits expectations, rose to a 24 per cent positive balance, after falling to 12 per cent after the Brexit vote.

Read more: Employer confidence stable as Brexit negotiations start

That was the lowest level since July 2012, when demand was weighed down by a European economy in deep recession.

The survey was conducted before the shock result in the General Election, which saw the Conservative party lose its majority, but it nevertheless illustrates the relatively steady performance of the UK economy since the referendum vote.

Growth accelerated towards the end of 2016, defying predictions of a sharp slowdown after the Brexit vote. That has supported business confidence, despite the weakness of economic growth of 0.2 per cent in the first quarter of the year.

However, recruitment difficulties surged to a 10-year high, with a balance of 52 per cent of the 1,500 firms surveyed saying they have struggled to find talented staff, a 20-point jump since the last survey in January.

Tim Hinton, a managing director at Lloyds Banking Group, said: “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."

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