Business leaders in the West of England are concerned about the state of the economy, but remain positive about their own trading prospects in the coming months, a new report has revealed.
Business confidence in the region fell four points during October to -4%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
West Country firms reported higher confidence in their own business prospects month-on-month, however - up two points at 9%. Top target areas for growth among firms in the next six months include investing in teams (33%); exploring new markets (26%); and investing in sustainability (23%).
The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. A net balance of 7% of South West businesses expect to increase staff levels over the next year, the same as last month.
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “Although South West businesses have concerns about the economy, their outlook on their own trading prospects – as we enter the busiest period of the year for many – is a more positive picture.
“In this kind of economic environment, cashflow is king. Firms that keep a close eye on margins and payments will be better positioned to weather future shocks as we head into the new year. It is also encouraging that the region’s firms report plans to invest in their people to target growth.”
Nationally, UK business confidence fell one point during October to 15%, in line with the average over the last three months. Firms’ outlook on their future trading prospects was up two points to 27%, with a net balance of 21% planning to create jobs - up four points on last month. However, businesses optimism in the wider economy dropped three points to 2%.
Five UK regions and nations recorded a month-on-month increase in optimism in October. Of those, London (up 16 points to 49%), the North West (up 14 points to 28%) and Wales (up nine points to 5%) saw the largest monthly increases, with London remaining the most optimistic region overall.
Business confidence in the manufacturing sector fell for the fifth month in a row to 13% - down one percentage point and the lowest confidence level since February 2021. Confidence in the retail sector declined by six percentage points to 9%, while confidence in the services sector also fell to 16% - both the lowest levels since early 2021.
However, the construction sector saw a 10 percentage point rise to 20%, although this level still remains weaker than in the first half of the year.
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