Business confidence barometer rebounds in optimistic March

Ben Southwood
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A FEBRUARY slide in business optimism was reversed in March, with sentiment back up with the highs it enjoyed at the end of 2012, according to numbers released this morning.

The number of firms reporting they were more pessimistic about the UK economy than they had been three months ago dived from 31 per cent two months ago to 26 per cent last month, Lloyds’ business barometer revealed.

At the same time, the fraction calling themselves optimistic climbed two percentage points, and the proportion saying they felt the same as a quarter earlier was up three percentage points.

This put the overall net balance – positive minus negative responses – at 20 per cent, the same as December’s result, which was the best since April last year.

And firms’ confidence over their own prospects in the coming year also soared, from a net balance of 32 per cent in February to 41 per cent in March. Just one in 20 firms thought their trading prospects would worsen over the coming year, versus nearly half who thought they would improve.

And according to Lloyds’ figures the employment boom was showing no signs of dissipating, with the index for staff levels running at a healthy 23 per cent, after February’s 24 per cent level.

“It is good to see that business confidence regarding how they view their own trading prospects and the wider economy has bounced back this month following last month’s sharp fall,” said Lloyds Bank chief economist Trevor Williams.

“The results suggest that a moderate pace of underlying growth in the first quarter of 2013 and the recent decline in the pound may have helped business confidence among exporters,” Williams added.

But the economist warned: “We will have to wait and see what the impact of the recent Cyprus banking crisis and adverse weather conditions, if any; will have on business confidence next month.”