Business confidence has risen across the South West as businesses enjoyed successful Christmas trading and now look forward to workers returning to offices.
The latest Business Barometer from Lloyds Bank Commercial Banking showed that confidence jumped by eight points during January to 37%.
Companies reported higher confidence in their own business prospects month-on-month, up nine points at 42%. When taken alongside their optimism in the economy, up six points to 33%, this gives a headline confidence reading of 37%.
A net balance of 29% of businesses in the region expect to increase staff levels over the next year, up nine points on December’s report.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence remain high across the region. Many firms, including those in our world-class hospitality and tourism sector, enjoyed a successful festive trading period and will be looking forward to welcoming people back now workers are once again returning to the office.
“The growth in the number of South West businesses expecting to increase staffing levels in the coming months will only further support the region’s economic recovery as we look forward to a prosperous 2022.”
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
The most recent survey found that overall UK business confidence remained steady in January 2022, dropping just one point from December’s reading of 40% to 39%.
Firms remained positive about their future trading prospects, despite a two-point dip month-on-month to 41%, and were optimistic about the economy overall, reporting a reading of 38%, up one point on December’s result.
The net balance of businesses planning to create new jobs in the next 12 months decreased marginally by four points to 29%.
Every UK nation and region maintained a positive overall confidence reading in January, with four reporting a higher reading than last month.
Along with the South West, Yorkshire and the Humber (up 13 points to 48%), Scotland (up 13 points to 37%) and the West Midlands (up nine points to 39%) all had stronger confidence readings month-on-month, with Yorkshire and the Humber now the most optimistic region.
Industry sector performance was mixed during January with confidence among manufacturers increasing by three points to 43%, reaching its highest level for three months due to an easing of supply chain pressures.
Retail confidence also rose (up one point to 44%) while confidence among firms in IT/communications remains particularly strong at 72%.
The impact of Omicron over the festive period meant the service sector extended its recent run of modest decreases in January, dropping one point to 38%. Positively, hospitality has recovered some of December’s decline, rising from 6% to 38%.
Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “January’s survey shows a continued resilience with minimal fluctuation as economic optimism remains at a historically strong level.
“A larger decline in confidence was potentially prevented by the reduction in Covid infection rates from early January and the prospects of the easing of restrictions across the UK. However, businesses remain cautious about the pandemic and are facing challenges from rising cost pressures although many are raising their prices in response.“
