Business confidence unchanged at 42%, continuing the positive trend since the start of 2024.
Retail confidence rises to a 2-year high, offsetting less positive service sector outlook.
Firms' staffing expectations remain relatively strong but edge back from last month's high.
Yorkshire & the Humber most confident region, but significant falls seen in the
The Barometer - which measures businesses' overall confidence by assessing their trading prospects and optimism for the economy - also found that results for these metrics remained at historically strong levels. The net balance for firms' trading prospects was unchanged at 49%, the second-highest level since 2017. A further 59% of firms (up from 57% last month) signalled stronger activity for the year ahead, while 10% predicted lower output (up from 8%).
Results for economic optimism improved, increasing by 1 point to 35%. This accounted for 56% of businesses who felt more positive about the economy (up from 54%) compared to 21% of businesses who felt less positive. It should be noted that most of this month's survey results were collected before official GDP data revealed monthly GDP growth of 0.2% in January.
One factor driving the sustained confidence overall is businesses' reduced concern about supply chain disruption. Following disruption to international shipping routes, businesses had previously expressed concern regarding the cost of and ability to do business. However, these concerns have eased in recent months meaning overall business confidence now matches the highest level seen in 2023 (42%).
Employment Insights
Elsewhere, firms' staff growth expectations remained positive albeit slightly down from last month's high. Overall, 46% of businesses said they expect to increase their workforce (down from 49%), while 19% plan to reduce their headcount (up from 13%). The smallest firms - those with fewer than 10 employees and a turnover above
The survey's figures for average wage growth could potentially indicate a gradual decrease in pay growth in the months ahead. The share of firms saying they expect to award 3% or more pay increases in the next 12 months fell slightly to 33% from 35%. In terms of pay in the past 12 months, there is further evidence of a downwards trend with the proportion of firms reporting 3% or more increases falling for the third month in a row (32%).
'Businesses also continue to signal optimistic hiring intentions, although slightly down on previous months. It's possible the impending minimum wage rises in April are beginning to come into sharper focus for businesses - especially smaller firms.
'Among the regions there was a mixed picture. Following unusually low confidence in February,
'Overall, the Barometer across the quarter suggests that we could begin to see more optimistic economic growth in 2024 than seen in recent years, although medium-term challenges remain.'
Pricing Insights
For the third month out of a possible four, businesses reported a fall in how much they expect to charge for goods and services - however, there could still be signs that inflationary pressures have not fully dissipated. Although only 60% of businesses expect to raise their prices in the next 12 months this is down from 61% in February. The net balance remains high from a longer-term perspective as firms indicate that maintaining or increasing their profit margins remains a key strategic priority.
Sector Insights
Services confidence fell 5 points to 40%, the first decline since December. That drop, however, was offset by rises in confidence in the manufacturing, retail and construction sectors. The gains in manufacturing (up 1 point to 41%) and construction (up 2 points to 40%) were relatively modest and confidence remained below levels seen at the start of 2024. Firms in the retail sector reported improved confidence (up 5 points to 45%), which was the strongest result for over two years.
'It's similarly pleasing to see a strong set of results across the sectors - particularly in retail which has faced significant challenges over the last couple of years.
'The results so far this year suggest that businesses are ready to invest in themselves and feeling optimistic about the economy, and we're here to support them in any way they need.'
Regional insights
While the overall
The
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