After plunging to a record low of -51 per cent in April, the balance of businesses feeling more optimistic than pessimistic about general economic prospects shot up by 20 points to -31 per cent last month. Although this level of optimism is still the second weakest recorded in the survey's history, it brings to an end a period of declining confidence which began in September last year.
However, optimism amongst the businesses about their prospects for the coming year fell sharply in May. The balance of firms expecting their own trading conditions to improve over the next 12 months, dropped from +42 per cent in April to +24 per cent in May - the lowest level since the survey began in 2002.
Firms in the distribution sector suffered the most dramatic fall in confidence (down 19 points to 22 per cent), with services businesses close behind, (down 19 points to 34 per cent). Manufacturing firms bucked the trend with a rise of four points to 41 per cent.
Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: "Business confidence has suffered a real blow this month. It's clear that firms are concerned about their prospects - and that doesn't bode well for investment and employment.
"The improvement in businesses' hope for the wider economy is something of an anomaly. But after so many months in negative territory, any upturn in their outlook is definitely welcome news. We'll need to wait and see what the next few months bring, before we can say with certainty that this improving outlook is more than just a blip."
