Lloyds Bank Business Barometer shows sharp decline in optimism
According to the latest Business Barometer from Lloyds Bank Commercial Banking, business confidence in the South West fell 25 points during September to 21 per cent, the lowest level in six months. This was the largest monthly drop among all UK regions and nations, and well below the national average of 32 per cent.
The survey, which polls 1,200 businesses monthly, found that companies in the South West reported lower confidence in their own business prospects month-on-month, down 23 points to 26 per cent. When taken alongside their optimism in the economy, down 27 points to 16 per cent, this gives a headline confidence reading of 21 per cent.
The decline in confidence coincided with rising challenges from supply chain disruptions, labour shortages, and inflationary pressures, which have affected many sectors of the economy. The Business Barometer also showed that a net balance of 10 per cent of businesses in the region expect to increase staff levels over the next year, down 25 points on last month.
Businesses look for growth opportunities amid uncertainty
Despite the drop in confidence, many businesses in the South West are looking for ways to grow and adapt to the changing environment. The Business Barometer revealed that their top target areas for growth in the next six months are:
- Evolving their products and services (40 per cent)
- Investing in their teams (31 per cent)
- Diversifying into new markets (21 per cent)
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “Despite a drop in confidence for South West businesses, it is encouraging to see firms looking within their own operations for growth opportunities. It’s fantastic that many firms exploring their product and service offering too as they gear up for a busy final quarter of the year.”
UK business confidence hits 10-month high
While business confidence in the South West slumped to the lowest level in six months, the UK as a whole saw a surge in optimism, reaching a 10-month high of 32 per cent in March. This was driven by increases in firms’ assessment of their trading prospects and economic outlook, as well as improving hiring intentions.
The Business Barometer also showed that confidence increased in three quarters of the UK’s regions and nations, with the biggest increase seen in Wales, which rose to 26 per cent, up 25 points. London also bounced back 29 points to 37 per cent, while the North West and North East saw strong growth as well.
Paul Gordon, Managing Director for Relationship Management, Lloyds Bank Business & Commercial Banking, said: “Business confidence has seen a surge this month with economic optimism and trading prospects bolstering firms. With hiring intentions improving, we may see employment growth picking up in the coming months.”
