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South West business confidence falls back in December

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Adam RaineyAdam RaineyBusiness confidence in the South West of England dipped 12 points in December to end the year at eight percent.

The latest Business Barometer from Lloyds Bank reports that firms in the South West now have less confidence in their business prospects, with a fall of nine points since November to 16 percent.

Sentiment about the economy flipped in the last month, with a net balance of one percent saying they are pessimistic, compared with a balance 16 percent who were optimistic in November.

Companies’ hiring intentions showed that a net balance of 12 percent of businesses in the region now expect to hire more staff during the next year, down nine points.

Across the UK, overall confidence fell seven points to 17 per cent as firms’ optimism about the economy dropped 10 points to seven per cent.

Companies’ confidence in their own business prospects slipped five points to 26 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 of England at Lloyds Bank Commercial Banking, said: “A different picture has been painted across the South West this December compared with November, which is likely a result of ongoing uncertainty.

“While last month we saw firms across the region looking to hire and start next year with investment and growth in mind, we are now seeing management teams adopt a more cautious approach.

“As in the UK as a whole, overall confidence has taken a dip but firms in the South West have shown great resilience in the past.

"There is a wealth of opportunity for the region as we approach the New Year from continued opportunities in the Hinkley Point C supply chain and a booming aerospace sector, to the demand for skilled jobs along the M4 corridor.”

Across the region, a net balance of 15 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 with 13 percent a month ago.

Businesses in London showed the most confidence, at 32 percent, ahead of the West Midlands (27 percent) and Wales (20 percent).

The survey was conducted with 1,200 companies – including 105 businesses in the South West - between November 29 and December 14.