Business confidence in South West continues to fall

Business confidence in the South West fell sharply in May according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the South West reported lower confidence in their own business prospects month-on-month.

South West businesses identified their top target areas for growth in the next six months as evolving their product or service offerings (41 per cent), diversifying into new markets, investing in teams, and introducing new technology (all at 23 per cent).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

A net balance of 35 per cent of businesses in the region expect to increase staff levels over the next year, up three points on last month.

Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “Despite a slight dip in confidence levels it’s encouraging to see firms looking to increase staffing levels in order to take advantage of growth opportunities.

“A combination of bank holidays and rising temperatures could be the tailwind the regions hospitality and leisure businesses need to kick start a season of strong summer trading.

“Businesses that act swiftly to manage working capital needs and keep a close eye on their margins will be best placed to capitalise on timely prospects.”

Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “As the economic environment remains challenging, compounded by stubborn inflation and higher wage pressures, business confidence has dipped slightly this month as firms feel cautious about the wider economy and their own trading prospects.

“However, while firms’ trading prospects and economic optimism both eased back, they still remain in positive territory as the UK has avoided an outright contraction in GDP – indicating a certain amount of underlying resilience in the economy.”