Businesses in the South East are among the most optimistic in the UK when it comes to confidence over the months ahead - but warn of challenges ahead.

Those are the key findings of the latest quarterly UK Business Confidence Monitor, published by the Institute of Chartered Accountants in England and Wales (ICAEW).

Key concerns include a shortage of skilled staff, high staff turnover and regulatory restrictions.

The survey revealed firms in the region are the most confident in the future since the survey began in 2004, with customer demand challenges easing, a fall in late payments and a rapid increase in employment.

Andrew Griggs, senior partner at accountants and business advisors Kreston Reeves, which has offices in Canterbury, Chatham and Sandwich, said: “Despite the impact and challenges of Covid and Brexit that we have all faced over the last couple of years, it’s inspiring to see that for the second successive quarter the South East’s business confidence has climbed to its highest level since the survey began in 2004.

“We are seeing clear signs of a post-Covid recovery, the economic position is continuing, and inflation has picked up with businesses planning increased investment. However, the future remains unclear with many challenges and obstacles to face. Supply chain, distribution and future employment needs are and will continue to present very real challenges and increased costs to business that can hold back growth.

“Now, more than ever, businesses need to think and plan ahead to prepare for the shape of the business they wish to see in six, 12 and 24 months’ time.”

He adds: "Organisations are in a pre-new normal stage where many have had to pivot their operations and markets to take account of changing customer demands, values and supply chains. People have had to adjust in society over the last 18 months and are still working out what the future will mean for how they live and work.

“The pandemic has facilitated a surge in organisations looking at how they operate with customers, suppliers and people. This has foisted the fifth industrial revolution, a combination of machines and people in the workplace, upon us. As a result, this has hastened the pace of change and forced organisations to think more laterally and creatively which will leave many of them in a much stronger position coming out of the pandemic and going forward.”

Head to our business page for all of the latest news about businesses in Kent