Business leaders in the South West are growing more confident about the future of their companies and are looking to target growth in the New Year, new research has revealed.
Overall business confidence in the region rose 12 points during December to 17% - the highest level since August - according to the latest Business Barometer from Lloyds Bank Commercial Banking.
South West firms also reported higher confidence in their own business prospects month-on-month - up 15 points at 34%.
Bosses identified their top target areas for growth in the next six months as evolving their product or service offering (32%), investing in their teams (29%), and investing in sustainability (29%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends regionally and nationwide. A net balance of 13% of businesses in the region expect to increase staff levels over the next year, up two points on last month.
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “It’s encouraging to see firms’ confidence reach the highest levels since the summer as we head into the New Year. Of course, challenges like rising inflation and supply chain problems persist, but the fact that the region’s businesses are continuing to target growth shows their resilience and ambition for the coming year."
Nationally, business confidence rose seven points during December to 17%. The proportion of businesses that felt positive about the wider economy was up 10 points month-on-month to 8%, while the outlook on their own future trading prospects increased by two points to 27%. Businesses also remained optimistic about job creation, with 16% of firms planning to hire more staff in the next 12 months – up two points on November.
The manufacturing sector reversed a six-month trend of falling confidence, with a nine-point rise to 13%. Confidence in construction and services also increased by nine points to 29% and 18% respectively. However, retail confidence fell slightly, by two points to 13%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, added: “Business confidence has received a boost in the run up to Christmas as firms anticipate a better festive trading period than last year. While firms report being hopeful for a more successful 2023, inflation and the risk of an economic downturn remain the biggest concerns for businesses, with rising costs evidenced by the number of firms expecting to raise prices.
“Wage growth is expected to remain high for now as retaining existing staff and attracting new talent will continue to be priorities for many businesses going into next year.”
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