Business confidence in the South West of England fell six points during July to 19 percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the South West report lower confidence in their business prospects at 18 percent, and lower economic optimism at 19 percent.
As a result, a net balance of 20 percent of businesses in the region now expect to hire more staff during the next year, down eight points on last month.
Nationally, overall confidence edged ahead to 30 percent, up one point on June, as firms’ optimism about the economy rose two points to 25 percent.
Businesses’ confidence in their own business prospects was steady at 34 percent.
The Business Barometer questions 1,200 businesses every month and provides early signals about UK economic trends both regionally and nationwide.
Andrew Kemp, regional director for the South West of England at Lloyds Bank Commercial Banking, said: “Businesses across the South West have seen their confidence slide since earlier this summer, with both a lack of optimism about the state of the economy and their own prospects driving this feeling.
"In some ways, this can be attributed to continued economic uncertainty. But this is not preventing them from investing in growth, with more firms still expecting to increase their staffing levels than reduce them, albeit at a reduced rate than a month ago.
“It is good to see firms constantly revisiting and refreshing their strategy plans to respond to both challenges and opportunities. Uncertain conditions increase the need for firms to manage their working capital closely so they have access to the funds they need to deal with unforeseen changes.”
Across the region, a net balance of four percent of businesses feel that the UK’s exit from the European Union will have a negative impact on their expectations for business activity. This contrasts with a month ago, when a net balance of 11 percent of firms expected it to have a positive impact.