Business confidence in the South West fell by two points during February to 33 percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies across the region reported lower confidence in their business prospects at 33 percent, down five points from last month, while economic optimism remained unchanged at 32 percent.
Together, this gives an overall confidence of 33 percent, which is two points below last month’s figure of 35 percent, and in line with the national average.
Nationally, overall confidence fell two points to 33 percent, driven mainly by a fall in firms’ confidence in their own business prospects.
Companies’ hiring intentions showed that a net balance of 28 percent of businesses in the region expect to hire more staff during the next year, down three points on last month.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
David Beaumont, regional director for South West at Lloyds Bank Commercial Banking, said: “Business confidence among South West businesses in February remained steady, and this was reflective of the picture nationwide.
“Firms’ outlook for the economy overall remains positive, which explains why so many of the region’s firms are still planning to grow their business and hire new staff.”
Across the region, a net balance of four percent of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, down three points on a month ago.
Overall confidence was highest among businesses in London, at 50 percent, followed by the North East and East Midlands, both at 42 percent.
Businesses in the South East were least confident, with an overall confidence 10 points below the national average of 33 percent.
The manufacturing sector reported the highest level of overall confidence at 41 percent, overtaking construction, where confidence dropped five points to 37 per cent in January.
Elsewhere, confidence in consumer services – which includes retail – rose from 27 percent to 31 percent, driven by stronger retail sentiment, which leapt 20 points from 17 percent to 37 percent.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Across the country, firms remain resilient and have maintained last month’s increase in economic optimism.
“Nationwide, the survey is consistent with slightly stronger growth in GDP in the first quarter of 2018 than was seen in the last quarter of 2017.”