This quarter, confidence decreased significantly across both small and large businesses: Established businesses with turnover up to £1m at 31 (-5 points) and Large businesses with turnover £1m+ at 34 (-6 points). However, Start-ups saw a positive increase at up +2 points to 36, although not significant.
The most pessimistic region is Midlands/East England with a Confidence Index of 30, whilst it is London and the North that retains the most confidence with an index figure of 34.
Whilst all regions saw a fall to Business Confidence, Midlands/East appear to have experienced the largest decline in Q1 2025 of -6 points, however the North and the South East also saw a significant decline since last quarter.
Confidence decreases in almost all industry sectors
At Q1 2025, confidence decreased in 8 of the 9 industry sectors. 4 of 9 sectors saw larger decreases of -8 points (Education, Agriculture, Production and Construction), whilst 4 of the 9 sectors saw a smaller downward change (Business Services, Transport, Wholesale and Other Services).
The Agriculture sector has recorded the lowest Confidence Index (25) after a significant -8 point fall in Q1 2025. Construction is the 2nd lowest sector in Business Confidence (30), also recording a significant -8 point fall, despite the government’s ambitious housebuilding and infrastructure plans for this parliament.
However, the Accommodation sector has seen a significant increase of +7 points to a score of 35 but remains lower than 50 and indicates pessimism towards the health of the UK economy.
Amongst start-ups and small businesses, Business Confidence decreased for 35+ age groups
Looking at start-ups and established businesses with a turnover of £0-2m, Business Confidence slightly increased for younger business owners (up to 34-year-olds) by +4 points to 36. However, the Confidence Index decreased significantly by -6 points for older business owners (65 and over), falling to 30.
The scores for those aged 35-64 also significantly decreased by -5 points to 32 for this quarter.
Commenting on the findings Helen Davey, Director at Savanta, said:
“In the wake of a notable downturn in Q4 2024, UK Business Confidence continues to face challenges, experiencing another significant decline in Q1 2025. The confidence index has fallen by 4 points, reaching a score of 32.
This decline is not unexpected, as it mirrors the recent turbulence across global markets. Contributing factors include the implementation of certain tariffs, and the ongoing efforts to reshape global trade, potentially leading to future tariff adjustments, all of which no doubt has created major uncertainty and the likelihood of higher costs.
The prevailing uncertainty regarding various nations’ economic policies has further impacted confidence, resulting in the second-lowest recorded score since data collection began, with only Q4 2022 reflecting a lower score.
Hopefully a more stable and clarified global economic landscape will come into fruition in the upcoming months, offering greater stability and assurance for UK businesses.”
Quarterly findings are from Savanta’s Market Vue Business Confidence programme conducted among 2774 GB businesses from start-ups to companies with £1bn turnover, surveyed between 2nd Janaury 2025 – 24th March 2025.
Indices are mean scores based on a scale of ‘extremely positive’ (100), ‘fairly positive’ (75), ‘neither positive nor negative’ (50), ‘fairly negative’ (25) and ‘extremely negative’ (0), for the question “How do you feel about the current health of the UK economy?”
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