Business confidence in March sustains high seen in previous month
Business confidence among retail firms rises seven points to almost 10 year high
Manufacturing firms’ confidence falters amid uncertainty surrounding supply chains
Trading prospects remain unchanged, at highest level since 2017
Business confidence in the UK remained robust at 49% in March, maintaining its highest level since August 2024, according to the latest Lloyds Business Barometer.
This sustained high was driven by a significant boost in confidence among retail firms, which saw a seven-point rise to 58%, the highest seen since August 2015. While overall business confidence remained stable, economic optimism slightly declined. Sixty per cent of businesses felt more optimistic about the economy, down from 63% last month, while 19% were less optimistic, leaving the net balance for economic optimism down one point to 40%. However, this remains the highest levels since August 2024.
Trading Prospects
Businesses’ own trading prospects also remained unchanged at 57%, marginally surpassing last year’s high of 56%, and reaching the highest level since 2017. Nearly two-thirds (64%) expect stronger activity in the coming year.
The Lloyds Business Barometer surveys 1,200 businesses monthly, providing early signals about UK economic trends both regionally and nationwide. Data this month was collected between 3 – 17 March. The results show that businesses confidence levels in March were significantly above the long-term average of 29%.
Employment Insights
Businesses reported a slight decline in hiring intentions, falling one point to 40%, driven by the manufacturing and construction industries. Despite this dip, it remains the second strongest level since the pandemic. Pay expectations eased this month but remain higher than late last year.
Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said:
"Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally. Despite this, today's data continues to reflect a positive growth trend in the UK economy. With confidence maintaining last month’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities."
Sector Insights
Retail confidence rose seven points to 58%, a post-pandemic high, reflecting positive trading prospects.
In contrast, the manufacturing sector saw the largest decrease in business confidence this month, declining 12 points to 39%, due to increased concerns about supply chain disruptions. Construction firms also saw a decline to 48% and businesses in the service sector saw confidence decline to 47%.
Regional Insights
Seven of the UK’s 12 regions and nations reported stronger business confidence, with the West Midlands and London seeing highest confidence levels, followed by the North West and Scotland. Sentiment in Wales, the South East and Yorkshire and the Humber saw significant increases, placing them above the national average. The North East and East of England saw substantial declines in confidence, from their highs of 69% and 61% respectively, down to 43% and 29%.
Paul Kempster, Managing Director for Commercial Banking Coverage, Lloyds Business & Commercial said:
“The findings of the latest Business Barometer are encouraging, maintaining the previous month’s uplifted business confidence and economic optimism across the UK."
“At Lloyds, we are committed to supporting businesses and our range of financial services and expertise are designed to help firms navigate the evolving economic landscape, seize new opportunities, and achieve their growth ambitions."
Pricing Insights
Businesses price expectations decreased from February's five-month high but remain higher than in January. Sixty-three per cent of firms expect to raise their prices in the next 12 months, while only 2% plan to reduce them.
