International trade has always been a fine balance of opportunity and risk. The autumn edition of FD Gameplan explores what this means for FDs, with insight and acumen from leading business strategists, and actionable analysis from our own trade experts.
Find out more and inform your trade strategy today with FD Gameplan
With a network of corporate offices across the UK and the world, you can rest assured that we are not only nearby when you need us, but we also have the local knowledge to help your company’s success.
Our latest Business in Britain survey reveals growing economic confidence.
Read the full report >
Whatever your business goals and ambitions, we are committed to developing a strong working relationship with you and providing you financial solutions, based on understanding your needs.
Terms and Conditions for Products & Services
Our team of economic research experts provide in-depth analysis and reports on topical economic, financial and industry issues.
More information on Lloyds Bank online services
More information on Bank of Scotland online services
Welcome to the latest edition of our bi-annual Business in Britain survey, which offers an invaluable guide to past business performanceand future expectations of companies, particularly in the SME market.
The latest survey has canvassed opinions of 1,812 companies covering all industry sectors and regions of the British economy. The key message from the latest results is that the economic recovery is fragile, but remains intact. Sales and turnover in the first half of the year improved, especially for companies able to benefit from strong export demand. Profitability, however, remained weak despite a rise in prices charged, suggesting a further squeeze on margins resulting from higher costs, mainly from materials and energy. Employment and investment spending weakened a little in the past six months.
Looking ahead, our measure of business confidence (which takes into account expectations of sales, orders and profits in the next six months) rose slightly, but remained around levels consistent with a moderate pace of recovery. Companies remained cautious about increasing staff levels and capital spending in the current uncertain economic environment.
Sales and turnover were the strongest in the manufacturing and transport services sectors in the past half year and are expected to be the most buoyant in hospitality and leisure, manufacturing and business services in the next six months. In terms of investment spending trends for the second half of the year, healthcare and business services came top, suggesting good medium-term prospects in these sectors.
From a regional perspective, sales and turnover in the past six months were the strongest in the South East, London and the Midlands, and weakest in Scotland and the North West. Looking ahead, business confidence was the strongest in London, with Wales recording the biggest improvement.
I would like to thank all those companies that have taken the time to provide us with such a comprehensive view of developments in the UK SME space and recent trends in the economy.
Total sales improved in the past six months and are anticipated to rise further in the next six months, boosted by the strongest anticipated export sales since 2004. The strength of international demand, however, belies a much more subdued outlook for companies more reliant on domestic spending. Indeed, our survey shows that weak UK demand was cited by more than half (56%) of companies as the greatest threat to their business, a much higher proportion than costs and availability of finance (23%) and regulation (19%).
Prices and profite: past performance and future expectations.
Investment, employment and capacity trends.
Despite higher prices charged, profitability is expected to remain weak, suggesting that higher costs will continue to erode margins. Difficulties in recruitment of skilled labour rose slightly, but remained low by historical standards, indicating that growth in unit wage costs is likely to remain relatively muted. Investment and employment trends remain subdued, highlighting companies’ uncertainty about domestic demand prospects, with exporters tending to be more positive about prospects for capital spending and staffing than companies reliant on domestic demand.
The key take out from the latest Business in Britain survey is that companies expect the economic recovery to continue in the second half of the year, butare cautious about its strength. Indeed, companies cited weak UK demand as the greatest threat to their business, while a majority now expect interest rates to rise in the next six months.
Export sales have continued to perform strongly although companies reliant on domestic demand, remained cautious about raising employment and capital spending levels. Profitability remained subdued, despite higher prices charged, implying a significant impact of higher costs on margins. Unit wage costs, however, are likely to stay weak given that difficulties in recruiting skilled labour remained at historically low levels.
Sales over the last six months and Business confidence.
Employment in the next six months and Capital spending in the next six months.