The survey, for August, shows that businesses are regaining their optimism in the outlook for the wider economy. The overall balance of firms expecting business activity to rise over the next 12 months gained an extra two percentage points, rising to 32% from 30% in July.
The balance is calculated by deducting the percentage of firms with negative expectations from those with positive expectations. In August, the number of firms expecting activity to improve over the coming year fell slightly, from 45% in the previous month to 42%. But this decline was offset by a great fall in the number of businesses expecting activity to slowdown - 10% in August, compared to 15% in July.
The rise in the balance expecting better trading prospects was backed up by a further improvement in sentiment about the wider economy. The balance of firms anticipating better economic conditions in the next 12 months rose to 46%, from 40% in July. The number of companies reporting greater optimism rose only marginally, to 61% (from 60% last month), but levels of pessimism declined more markedly (from 20% to 15%).
Across the regions, there was a surprising 10% slide in the confidence of firms in the South - the balance of these firms now expecting better trading over the next year, fell to 28%. This means the confidence of southern firms is now lower than those in the North and the Midlands, where the balance climbed 14% to 37%, and 7% to 32%, respectively.
Trevor Williams, chief economist, Lloyds TSB Corporate Markets, said: "We're now seeing a clear upward trend in firms' confidence about their own prospects and those for the economy as a whole. As global demand stabilises and shows signs of recovery, businesses are once again starting to rebuild their stocks, after many months in the doldrums. And that's giving them reason to be more upbeat.
"But we should not forget the impact that the extraordinary policy measures, such as record-low interest rates, are having on the economy at the moment. While we may see a return to growth in this quarter, any sustainable recovery is still very much dependent on these policy measures improving consumer and business spending. So, while the rise in confidence is welcome, an air of caution is more than appropriate."
