Business confidence in the South West rose for the first time in 2023, climbing 18 points to 19%, despite the uptick in inflation and corporation tax.
Businesses in the region are remaining hopeful in the economic outlook with the Chancellor’s Budget announcement "providing a sense of optimism for firms."
A survey by Lloyds Bank found companies in the South West reported higher confidence in their own business prospects month-on-month, up 10 points at 29%. When taken alongside their optimism in the economy, up 24 points to 8%, this gives a headline confidence reading of 19%.
Overall UK business confidence climbed 11 points to 32% in March, with firms reporting their highest confidence levels since May last year, with eight out of 11 regions and nations reporting higher levels of confidence than February.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
On average, firms felt positive about their own trading prospects with 39% of firms expecting business activity to increase in the next 12 months, up eight points on last month and 25% said they would increase staff levels by this time next year, up five points month-on-month. A net balance of 18% of businesses in the South West region expect to increase staff levels over the next year, up 26 points on last month.
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: "Firms' optimism in the UK economy reached its highest level in over 12 months suggesting businesses see a landscape where they can deliver on their growth plans.
“As we head into Spring, many businesses, particularly in the tourism and hospitality industries, will see an increase in activity, firms who keep a close eye on working capital, cash flow and stock levels will be best placed to capitalise on the busy bank holiday season.”
There was a broad rise in business confidence across the sectors, particularly in construction, 47% up 28 points, and manufacturing, 37% up ten point, both at ten-month high and retail, 32% up 11 points, the highest since February 2022.
For the second month in a row the West Midlands reported the highest levels of business confidence at 48%, unchanged month-on-month, followed by Scotland, up 24 points, London, up 20 points, and the North East, up two points, all at 38%.
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