South West firms’ confidence in their own trading prospects bounced back somewhat from a sharp fall in December, rising four points during January to 20 percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
This comes despite the fact that companies reported greater economic pessimism, up four points to five percent, pulling overall confidence down one point to seven percent.
Businesses’ hiring intentions showed that a net balance of seven percent of businesses in the region expect to hire more staff during the next year, down five points on last month.
Meanwhile, a net balance of 17 percent of businesses also 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 15 percent a month ago.
Across the UK, overall confidence rose two points to 19 percent as firms’ optimism about the economy climbed three points to 10 percent. Companies’ confidence in their own prospects edged up one point to 27 percent.
Nationally, the construction and manufacturing sectors had both the highest confidence – 30 percent and 28 percent respectively – and the strongest hiring intentions – 26 per cent and 30 percent respectively.
The retail (14 percent) and services sectors (19 percent) had both the lowest confidence as well as the weakest hiring intentions at nine percent and eight percent respectively.
These pictures were also reflected in the sectors’ views about the impact of Brexit.
Net balances of 15 percent (services) and 13 percent (retail) expected the UK’s exit from the EU to have a negative impact, compared with just three percent in manufacturing.
A net balance of nine percent of construction firms expect it to have a positive impact.
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: “Despite their pessimism about the economy, firms’ confidence in their own prospects has grown, demonstrating their resilience amid ongoing uncertainty.
“To support this further, we have pledged to lend £1.5bn to businesses in the South West this year, as part of our continued commitment to helping Britain prosper.
“Although fewer businesses are planning to create new jobs, we hope to see this bounce back as more certainty emerges over the coming months.”