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Business confidence dips again in June

25/07/2008

British businesses remain pessimistic about the economy but believe they will survive the downturn, a survey reveals.

The Lloyds TSB Corporate Markets Business Barometer for June shows the balance of companies feeling 'more optimistic' rather than 'more pessimistic' about the next twelve months dipping to -40, from -31 in May.

In total, 22 per cent of companies were more optimistic, while 62 per cent were more pessimistic.

However, the balance of firms who believe their business activity will rise over the next year rose by eight per cent in June, to 32 per cent.

Trevor Williams, chief economist for Lloyds TSB corporate markets, said: "Month-on-month business confidence in the economy is waning, but so far these worries have not shaken the faith most firms have in their own trading prospects.

"Although we've seen some signs in recent days that oil prices may be falling, with such huge increases in the past few months and with such volatility in the housing and stock markets, the pressure on consumer spending and company performance continues to build."

Across the sectors, retail and distribution businesses hold the most pessimistic views about the wider economy. A balance of -50 per cent of firms were more pessimistic than optimistic than three months ago, compared to a balance of -38 in May.

Services and industrial are the most positive (balances of -36 and -34 respectively), while regionally, it is firms in the north which have the bleakest view of economic prospects (a balance of -43, compared to -38 in the south and -37 in the Midlands).