South West businesses signal more positive economic conditions lie ahead

Amanda Dorel

New research has found that two fifths of South West firms are making New Year’s resolutions to improve their productivity, as businesses signal confidence in more positive economic conditions ahead.

This optimism about the future comes after 2023 being a tough year for businesses, as they faced into high inflation and a sluggish economy.

The data from Lloyds Bank revealed the top three areas where firms are focusing their attention as they head into the new year, with two fifths (43%) wanting to increase staff wages, a third (34%) focussed on developing their business and a third (32%) committed to investing in training.

As businesses take stock ahead of the New Year, many are reporting they are looking at ways to ensure they have a healthy cashflow, with more than a third (36%) of firms reporting plans to keep a closer eye on costs over the next 12 months.

The data also shows that businesses are setting themselves up for growth, by building teams to support new opportunities, with more than half (53%) expecting to hire more staff in the New Year.

With the expectation of inflation continuing to fall, three quarters (76%) of firms are confident that they will see their business become more profitable in 2024 compared to 2023.

Over two thirds (71%) expect their turnover to increase in 2024. Of those expecting an increase in turnover, more than a quarter (27%) anticipate growth of 5%-10% and almost a fifth (16%) have eyes on growth of 11%-20%.

Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “While this year has had its challenges, the recent fall in inflation and stabilisation of interest rates are helping to create an environment where South West firms are feeling more confident to take steps to boost their productivity and target growth.

“It’s encouraging to see firms in our region setting ambitious plans for 2024. Hopefully the New Year will see demand for our world class tourism and hospitality services improve further, and help fuel growth across the region next year