Business confidence slumps in South West as challenging conditions remain

Amanda Dorel

Business confidence in the South West slumped over the last month – according to a survey from a leading bank.

Companies in the region reported lower confidence in their own business prospects month-on-month – according Lloyds Bank Business Barometer.

South West businesses identified their top target areas for growth in the next six months as evolving their offering (37 per cent), entering new markets (34 per cent) and investing in sustainability (33 per cent).

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

A net balance of two per cent of businesses in the region expect to decrease staff levels over the next year, down last month when a net balance of 13 per cent of businesses expected to make new hires.

Overall. UK business confidence climbed in January, with firms reporting their highest confidence levels since July last year.

Ahead of National Apprenticeship Week (6-12th February) 30 per cent of businesses across the UK reported that they are looking at opportunities to grow by investing in staff development and training.

A net balance of 17 per cent of firms reported plans to create new jobs in the next twelve months.

Amanda Dorel, regional director for the South West at Lloyds Bank said: “It’s encouraging to see firms thinking long-term as we enter the new year, with many exploring ways to diversify their markets and invest in greener ways of working.

“Those looking to diversify their markets can tap into tools that will allow them to examine international opportunities, and those looking to increase sustainability can access discounted lending through the Clean Growth Finance Initiative.

“Although it’s been a challenging few years, we’re hopeful 2023 will offer more opportunities for the region and we’ll be by the side of businesses to help them capitalise on their future success.”

For the second month in a row, confidence in the manufacturing and service sectors increased, with manufacturing rising to 28 per cent (up 15 points) and services up to 25 per cent (up seven points).

Business confidence in construction was down two points to 27 per cent, while retail confidence fell for the second month in a row to seven per cent (from 13per cent), the lowest level since February 2021.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Business confidence continues to improve following the December boost. Firms are clearly more optimistic about the wider economy and this is driving the increase, helped by precursory signs that wage and other cost pressures may be easing.

“It is still a tough environment for businesses, with high energy bills remaining a concern during the winter months, but there are grounds for optimism for 2023 if inflation starts to trend lower.”


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