Lloyds survey shows fall in UK business confidence

Overall business confidence has fallen by 17 percentage points to 6% during March, the lowest level since October 2019, reflecting a drop in both trading prospects and economic optimism, according to the latest Lloyds Bank Commercial Banking Business Barometer.

Lloyds suggested the decline illustrated the impact that the Covid-19 outbreak was having on business confidence before many initiatives recently launched by the Government to help combat the virus had been announced.

The results, which surveyed 1,200 businesses from all sectors and regions of the UK between 2 and 16 March 2020, showed a much sharper fall in overall confidence in the second week of the survey to -3%. The bank suggested this matched the low since December 2011, and was otherwise the lowest dip since March 2009 during the global financial crisis.

The survey results also showed that economic optimism also fell sharply from 23%, its highest level for 17 months, to 3%. Similarly, these results saw a sharper fall during the second week of the survey, which saw levels at -10%.

Responding specifically to the impact of the coronavirus pandemic, Lloyds reported that more than 70% of businesses stated they had been or would be affected. These results for the second week of the survey saw another marked change, with 61% of businesses reporting an impact due to the coronavirus in the first week, rising to 88% reporting an impact in the second week.

Lloyds senior economist, Hann-Ju Ho, commented: “The results in March demonstrate the impact of the shutdown of large swathes of the economy to combat the pandemic even in advance of the Government’s stringent measures announced in recent days.

“Sentiment has returned to historic low levels after improving in recent months. We will continue to monitor what businesses are telling us, and hope that they can take steps to minimise the impact of current economic downturn.”

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