British business confidence is faltering in the face of continued economic uncertainty and remains close to an all time low, according to Lloyds TSB.
The Lloyds TSV Corporate Markers Business Barometer survey for August found economic optimism among UK businesses remains firmly in the doldrums.
A balance of -33% of UK companies are more optimistic about prospects for the economy, rather than pessimistic, according to the survey.
The balance is calculated by subtracting all negative responses to a question from all positive responses. A total of 200 companies with turnover above £1m are represented by the data.
Over all, 20% of firms are more optimistic and 53% are more pessimistic.
The survey also found many companies are expecting weaker levels of business activity, in line with concerns about economic prospects for the coming year.
Trevor Williams, chief economist at Lloyds TSB Corporate Markets, says: "The cocktail of a weakening in economic conditions and tighter credit means that firms are very likely to trim investment spending even further than they already have."
He believes it is unlikely the UK will see a quick turnaround in this trend any time soon, given the worries businesses have about a potential recession.
"However, the recent fall in oil prices and declining input costs in other areas, do give reason for hope that pressure on operating margins may soon start to ease, so there are some signs of respite appearing."
A balance of 24% expect an increase, rather than decrease in activity but the figure is still far below the survey average of 50%, says Lloyds TSB.
Distribution firms have the weakest confidence levels in terms of their own business activity, across the sectors, the survey found.
A balance of just 12% say they expect an increase, rather than a decrease in business, while firms in the service sector are more optimistic with a balance of 32%.
Lloyds says the industrial sector appears to be in the strongest position, perhaps helped by a weaker currency. The sector has a balance of 42% saying they intend to boost activity.IFAonline
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