Confidence among business leaders in the West Country rebounded in August despite major economic challenges facing firms in the region, a new report has found.
South West businesses remain optimistic about the state of the economy, according to the latest Business Barometer from Lloyds Bank Commercial Banking, but reported lower confidence in their own prospects.
The barometer, which questions 1,200 businesses a month, found that business confidence in the region rose 12 points during August to 23%.
South West businesses identified their top target areas for growth in the next six months as evolving their offering (37%), investing in their teams (35%), and diversifying into new markets (28%). A net balance of 13% of firms in the region expect to increase staff levels over the next year, up five points on last month.
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “This month’s reading shows a pleasing boost in South West firms’ confidence, despite the many economic headwinds businesses across the region are continuing to face.
"With pressures caused by rising inflation unlikely to end anytime soon, cash retention is critical so keeping a close eye on working capital will be key. This will help firms to weather any further shocks and be able to take advantage of growth opportunities that come their way.”
Nationally, UK business confidence fell nine points during August to 16% - its lowest level since March 2021. Firms’ outlook on future trading prospects was down 32 points to 5%, and optimism in the wider economy dropped six points to 6%. The net balance of businesses planning to create new jobs also decreased five points to 16%.
While every UK region and nation reported a positive confidence reading in August (except the South East, where confidence dropped 15 points to 0%), only three recorded a month-on-month increase in optimism. Along with the South West, the North West was up 26 points to 44% and Yorkshire was up nine points to 23%, with the North West now the most optimistic region overall.
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