Picking up again in June following May’s pullback, they’ve now risen in six of the past seven months – with firms’ expectations for average pay growth now appearing to have picked up when compared to the start of the year while both wage and own price expectations remain elevated relative to pre-pandemic levels.  

The researchers found that 46% of businesses expect to add to their workforce, up two percent compared to the previous month, while there was a two percent drop in those anticipating fewer staff numbers – dropping from 20% to 18%. This resulted in the net balance increasing by four points to 28% – its highest point since June last year.  

Turning to firms’ wage expectation, the share of companies expecting at least two percent wage growth edged down by one point to 48% - however this is still higher than the 44% average in the first quarter of 2023. 

Additionally, the proportion expecting at least three percent wage growth was unchanged at 27%, although this is also higher than the 25% average seen in the first quarter of 2023.  

Lloyds Bank’s managing director for SMEs and mid corporates Paul Gordon said: It’s particularly pleasing to see that for both services and manufacturing, two sectors which have been hardest hit in recent years, there is real optimism for trading prospects and growth.  

“However, wage pressures continue to be above pre-pandemic levels and firms need to be mindful of this and ensure that costs are evenly distributed and managed closely.”