Business confidence down in July but up from start of year

BUSINESS confidence fell back in July after rebounding in June to a 13-month high, according to the latest Lloyds Bank Corporate Markets Business Barometer.

Less than half (46 per cent) of companies were more optimistic regarding economic prospects, a reduction from 51 per cent in June.

The number who were less optimistic nearly doubled last month to 27 per cent (from 15 per cent in June). and the number of firms feeling optimistic dropped 17 points to +19 in July.

“Confidence took a knock this month, most likely because of the concern that the sovereign debt crisis in our largest trading partner, the Eurozone, was spreading to countries such as Italy and Spain,” said Trevor Williams, chief economist of Lloyds Bank corporate markets,

Sentiment has improved since the start of the year. The three-month moving average net balance for economic prospects has risen from 13 per cent in February and 15 per cent in May to 23 per cent in July.

Sixty-four per cent of service sector firms expected trading prospects to improve in the next twelve months, up eight points, while only four per cent expected prospects to worsen.