Business confidence in South West on rise

BUSINESS confidence in the South West rose 16 points during April to 24%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the South West reported higher confidence in their own business prospects month-onmonth, up 23 points at 37%. When taken alongside their optimism in the economy, up seven points to 10%, this gives a headline confidence reading of 47%.

With this rebound of confidence from the following month, South West businesses flagged a range of growth opportunities for the next six months, including investing in talent (31%), introducing new technology (29%) and offering a new product or service (28%).

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

A net balance of 14% of businesses in the region expect to increase staff levels over the next year, up seven points on last month.

Overall, UK business confidence remained unchanged during April, at 33%. Firms’ outlook on their future trading prospects rose five points to 39%, but their optimism in the economy dipped slightly on March’s reading (down from 32% to 26%). The net balance of businesses planning to create new jobs also decreased by six points to 26%.

Every UK region and nation reported positive confidence readings in April. Wales (up 25 points to 20%), the South East (up 19 points to 30%) and the West Midlands (up 10 points to 42%) reported the largest increases month-on-month.

Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “While levels of confidence have risen across the region, it’s clear to see businesses are under pressure from the political and economic climate they’re operating within. With the sharp increase in cost of living, consumers have less access to the disposable income they had at the start of the year.

“Summer is always a busy time for the leisure and hospitality sectors, and we expect an increase in holidaymakers to the South West over the coming months. We will do everything we can to support their businesses and the wider regional economy in the months ahead.”

From a sector perspective, manufacturing confidence increased by eight points to 43%, erasing part of the 19-point decline in March, helped by somewhat stronger trading prospects.

Retail and services confidence, however, were little changed on the month and is weaker than at the start of the year, with businesses increasingly concerned about the outlook for the wider economy. Retail confidence edged up one point to 29%, while services confidence was unchanged at 32%. Construction confidence fell for a second month to 33%, but is still on a par with the all-sector average.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “April’s data is mixed and follows the significant decline in business confidence in March after Russia’s invasion of Ukraine. Although firms reported a partial recovery in their trading prospects, optimism for the wider economy declined for a second successive month.

“Positives remain as overall confidence is above the long-term average, but it is still expected that growth will moderate.”

Summer is always a busy time for the leisure and hospitality sectors, and we expect an increase in holidaymakers to the South West over the coming months AMANDA DOREL, LLOYDS BANK COMMERCIAL BANKING