Overall confidence unchanged at 42% for third month in a row, signalling continued positivity.
Businesses' economic optimism reaches the highest level for over two years at 39%
Firms' wage growth expectations pulled back for second month, although still above long -term average
Firms most upbeat in the East of
Although April is now the third month in a row where business confidence has not changed, firms did show more positivity than previous months in relation to the wider economy. In this respect, businesses reported the highest level of confidence in the economy since
Official monthly GDP data appears to corroborate these findings, as the data for January and February suggests the economy began to grow again early this year.
When asked about their own trading prospects, businesses continue to be positive, although slightly less than in previous months. Over half (55%) of the companies surveyed said they expected a stronger output over the next 12 months, while an unchanged 10% anticipated weaker activity. As a result, the net balance for trading prospects fell 4 points to 45%.
Concerns about supply chain disruption have reduced, compared to previous months. It is no longer the factor most concerning businesses, with interest rates, inflation, and energy prices the most prominent issues. Tellingly, even concern about these issues has continued to trend downward, coinciding with increased confidence reported by businesses.
Employment Insights
Businesses' overall staffing expectations regained momentum in April to negate most of March's decline. Nearly half of all firms (49%) reported that they intended to increase their workforce and hire more employees over the coming months. Meanwhile, businesses expecting to reduce their staff numbers fell to 16% (down from 19% in March). As a result, the net balance increased by 6 points to 33%, in a positive sign for the labour market.
Further analysis, however, shows that the smallest companies surveyed - those with the lowest headcount (fewer than 10 employees) - were still somewhat cautious, showing less readiness to hire new employees. This could partly be due to the increase in National Living Wage which came into force this month, with smaller firms potentially more disproportionately affected.
The increase to salaries delivered by the new National Living Wage may also have been a factor behind wage growth expectations pulling back in April. The number of firms expecting a 3% increase (or more) fell to 30%, the second consecutive monthly fall. Similarly, the number of firms expecting to issue pay rises of at least 4% declined for a second month. It is important to note that these figures remain above the levels seen before the pandemic.
'There continues to be a mixed picture among the regions, with the biggest rises seen in
'The second quarter of 2024 has started brightly for businesses, and we are seeing firms expressing greater confidence in an enduring economic recovery.'
Pricing Insights
Elsewhere, this month's survey also found that businesses expect to increase their prices in the coming months, highlighting increased pressures faced by
Sector Insights
Businesses in the manufacturing sector reported increased confidence this month, recording an increased score of 45% (up 4 points) which is the highest level for 3 months. Similarly, confidence among firms in the services sector (42%) and construction (41%) also improved, largely driven by greater economic optimism.
In retail, confidence pulled back slightly from last month's strong showing to 40%, illustrating that confidence in this sector remains fragile. Retail is also more liable to be impacted by external factors sectors other sectors do not face into, such as the poor weather.
'There are positive signs for the labour market with more businesses this month signalling they are open to hiring staff. However, the impact of minimum wage of companies' hiring intentions will be closely watched, and we are yet to see this materialise among the largest firms. Businesses with smaller headcounts however, have been a bit more cautious, although they remain broadly positive.
'Overall, businesses appear to be continuing the positive trend established at the start of the year, and we're here to support them with their ambitions going forward'.
Regional insights
There was a mixed picture at a regional level in this month's results. The most notable positive increases in confidence could be seen in the South West and
Results for
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