Business confidence in the UK took a hit in September, dropping to 36%, a five-point decline from the recent 18-month peak of 41% seen in August.
The decrease in confidence is attributed to a less optimistic economic outlook and reduced expectations for trading prospects in the coming year.
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Trading prospects dip as optimism wanes
Companies reported a decrease in trading prospects for the upcoming year, with 52% of businesses anticipating stronger activity, down by five points from the previous month.
In contrast, only 11% of businesses expected weaker outcomes, with no change from the previous month.
This shift resulted in the net balance falling by five points to 41%, compared to 46% in August.
Wider economic optimism also declines
Optimism regarding the broader economy saw a decline as well, with 51% of firms expressing greater optimism, a decrease of four points.
Conversely, 21% of firms reported being less upbeat, which is an increase of two points from the previous month.
The net balance for economic optimism fell by six points to 30%, though it remains relatively high compared to earlier in the year, marking the third-highest level in 2023.
Continued confidence above historical average
Despite the recent dip, overall business confidence levels continue to remain significantly above the 22-year historical average of 28%.
This trend reflects a general upward trajectory in confidence throughout 2023, with monthly increases consistently outweighing subsequent declines.
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