The South West's is outperforming the rest of the UK in terms of growth prospects for business, new data has found.
The West Country's combined "financial strength" and growth potential is now outstripping London by 11%, according to latest research from Clarity, the data arm of business advisory firm Quantuma.
Several sectors have been driving the region's growth, with retail and wholesale outperforming London by 44%, construction by 21% and leisure by 20%.
The growth has been driven by many retailers and businesses in the leisure sector returning to near-normal trading patterns as the South West recovered from lockdowns quicker than many other UK regions, Quantuma said. Wholesale businesses also outperformed the capital, benefitting from established routes of distribution of products by air and sea.
Despite wholesale and retail, and construction, providing some the biggest growth opportunities for the region, the report also found companies in these industries were at "significant risk" of falling into financial difficulty. According to Clarity, 75% of firms in the highest-risk category were in just five sectors – construction (19%), property (16%), wholesale and retail (14%), technology (14%), and financial services (12%).
Between September 2021 and January this year, levels of companies in financial distress in the region remained "stable" in comparison to the rest of the UK, Quantuma said.
Louise Durkan, managing director at Quantuma, said it was "encouraging" to see a broadly positive picture for the South West region and its SME community.
"[There are] strong growth prospects in several sectors coupled with levels of distress that are in line with the rest of the UK," she said.
"Whilst we might expect to see tourism and leisure making a strong comeback post-lockdown restrictions, it is interesting to see how our data indicates the relative strength of sectors like retail and construction in comparison to London."
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