Mixed picture on short-term outlook for region’s businesses as confidence levels waver

August 31, 2021

Optimism among South West firms in the economy is increasing as the region continues to recover from the pandemic, according to a new survey, but businesses have become less confident about their own prospects.

The latest Business Barometer from Lloyds Bank Commercial Banking shows confidence levels among firms in the South West dropped month-on-month by four percentage points at 25%. 

However, they had a far brighter view of the economy, with an 11-point rise in optimism to 48%.

Taken together, these give a headline confidence reading of 37% – up four points on last month – putting the region among the most-optimistic parts of the country.

While a net balance of 16% of businesses in the region expect to increase staff levels over the next year, this was a fall of 11 points on last month, perhaps reflecting a tightening labour market.

The Business Barometer questions 1,200 UK businesses monthly – around 100 of them in the South West – and provides early signals about economic trends both regionally and nationwide.

Overall UK business confidence rose six points in August, reaching 36% – the highest level recorded since May 2018.

When asked about their overall trading prospects businesses reported a six-point increase on July’s reading at 34% and firms’ confidence in the economy also increased six points to 39%. 

While all UK nations and regions had a positive confidence reading in August, with the North West (64%), North East (46%) and London (41%) the most confident, three regions registered fall – East Midlands (down 10 points to 28%), West Midlands (down three points to 27%) and Yorkshire and Humber (down two points to 26%).

Lloyds Bank Commercial Banking regional director David Beaumont, pictured, said: “It’s encouraging to see business confidence remain high in the South West, especially among our region’s leading tourism and hospitality businesses, who are enjoying a healthy period of trading during the peak summer season.

“Despite the challenges posed by ongoing labour shortages, firms remain buoyant about their recruitment plans over the next 12 months, which will play a vital role in stimulating the regional economy.”

Nationally, in sector terms, there was notable strength in those benefiting from the further easing of Covid restrictions, with services confidence rising by eight points to 36% – the highest level since January 2018.

Confidence in manufacturing and construction also picked up (both up seven points to 40%), led by rises in trading prospects for the year ahead.

The increase in manufacturing confidence came despite ongoing supply disruptions, although the level remains below the high in May.

Retail posted a smaller two-point rise to 34%, remaining below its May peak.

Comments are closed.


Reach tens of thousands of senior business people across Swindon & Wiltshire for just £70 a month. Email info@swindon-business.net for more information.