BUSINESS confidence in our region is the lowest in the country, according to new research.

The slow growth of sales and profits has been blamed for the south-east’s poor result.

It is based on a study by experts at Grant Thornton UK and the Institute of Chartered Accountants in England and Wales (ICAEW), who produce a confidence index.

The south-east’s result on the index was minus 2.0, which was the only negative result in a national average of 4.2.

It was partly down to a slowing in overall business performance in the region – with companies saying profits had risen by 1.7 per cent in the past 12 months, compared to 3 per cent in 2011.

Domestic growth was also down, with sales increasing by 1.2 per cent, down from 2.7 per cent in 2011.

Norman Armstrong, pictured, partner at Grant Thornton’s Southampton office, said the results were discouraging.

He added: “It is disappointing to see that companies in the south-east have the lowest business confidence in the country.

“The region has many thriving industries to be proud of and plays home to some major success stories in the form of dynamic businesses that are hungry for growth.”

More than 40 per cent of businesses in the region reported that customer demand is a greater challenge than a year ago.

A total of 45 per cent also said that competition in the marketplace has been more difficult over the past 12 months.

Companies in the region are expecting to increase capital investment in 2013 by an average of 0.1 per cent, compared to the national average of 1 per cent.

But regional director of ICAEW South East, Fay Webster, says there are some reasons to be encouraged by the results.

She said: “More needs to be done to secure the south-east’s long-term economic outlook by encouraging businesses to invest and to stimulate growth.

“Despite the weak economic conditions in the south-east, there is a glimmer of hope with sales abroad.

“Exports rose over the last year by 3.7 per cent, with further growth of 4.1 per cent expected over the coming 12 months.

“This is important for UK growth prospects as the south-east is the UK’s largest exporter region.”