South West firms are now the least confident in Britain after growing pessimistic about the economy during October, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Overall business confidence among firms in the region fell 22 points in October to two percent – the lowest level since Lloyds Bank began its Regional Barometer in January this year, and 17 points below the national average.
This comes on the back of the fact that a net balance of 12 percent of firms say they feel pessimistic about the economy than they were three months ago.
Last month, a net balance of 23 percent said they felt optimistic.
While companies in the South West also report lower confidence in their own business prospects at 15 percent, this fell less sharply than economic optimism, suggesting a greater degree of resilience when it came to firms’ own futures.
This was supported by the fact the underlying picture – measured by the average over the past three months – shows overall confidence of 14 percent, down only five points on a month ago.
Companies’ hiring intentions showed that a net balance of 11 percent of businesses in the region expect to hire more staff during the next year, down nine points on last month.
Nationally, overall confidence fell 10 points to 19 per cent, its sharpest fall and its lowest level all year, as firms’ optimism about the economy slumped 18 points to just eight percent. Companies’ confidence in their own business prospects fell three points to 29 percent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Adam Rainey, regional director for the South West at Lloyds Bank Commercial Banking, said: “Across the UK, falling optimism about the economy has weighed heavily on business confidence, and this is exactly what we have seen in the South West.
“But while firms’ confidence in their own prospects and their intention to hire more staff have both fallen, they have done so far less than their optimism about the economy as a whole – suggesting a resilience that will prove valuable as they await greater clarity about the country’s future trading relationships.”
Across the region, a net balance of 27 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, compared to nine per cent a month ago.
Furthermore, a net balance of eight percent said they would be more confident about their business prospects if a deal on Brexit was agreed in November.
The survey was conducted with around 1,200 companies – including 101 businesses in the South West - with turnover above £1 million between October 1 and 15.