Business confidence grows

Lloyds TSB Business Barometer for May found firms expecting business activity to rise rose to 44%, compared to 35% in April, while the number expecting activity to worsen, fell from 21% to 16%.

Survey highlights

• Confidence levels improved for the third consecutive month, hitting their highest levels in almost a year
• The balance for May (the positives minus the negatives) rose to 28% up 14% on the previous month
• The balance of firms expecting economic conditions to improve hit 40% (with 61% feeling more optimistic and 21% feeling more pessimistic). April's balance was 11%.
• Firms in the industrial and services sector saw a particular boost in confidence
• The balance of services firms expecting better trading conditions rose 16%, to 30%, while for industrials the balance increased by 29% to 15%
• Firms in the Midlands have the strongest confidence balance (53%), followed by those in the North (24%) and South (13%)

Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: "While it would be premature to talk of an end to the recession, we should be careful not to overlook the significance of the growing confidence we are witnessing amongst businesses.

"Confidence is always the foundation on which any recovery is built. We've now seen three consecutive months of growing optimism amongst UK businesses - and if this persists over coming months the recovery should not be too far behind."