Overall business confidence in the South West fell nine points to zero per cent during May, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies’ confidence in their own business prospects stands at 11 per cent, also down nine points on last month. This, taken together with their views on the economy overall, gives the overall confidence reading.
Businesses’ hiring intentions show a net balance of eight per cent of businesses in the region expect to hire more staff during the next year, down nine points on last month.
Across the region, a net balance of 22 percent of businesses say they feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, down eight points on a month ago.
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: “After experiencing an uplift in confidence last month, it is disappointing to see firm’s sentiment slip this month, though this is in line with the national trend.
“We know that South West businesses continue to harbour ambitions for growth and it’s important that management teams remember there is support on hand. We are committed to being by the side of businesses in the region, which is why we have pledged to lend £1.5billion to companies across the region this year.”
Across the UK, overall confidence slipped four points to 10 percent as firms’ confidence in their own prospects fell six points to 17 per cent, while their economic optimism dropped two points to two percent.
Businesses in Yorkshire and the Humber show the most confidence, at 23 percent, ahead of the West Midlands (21 percent).
Those in the East of England are the least confident, with an overall confidence of minus nine percent, 19 points below the national average.
However, confidence rose among manufacturing businesses for the second consecutive month, up five points to a four-month high of 21 percent. The sector was the most confident in both trading prospects and economic optimism.
The services sector continued to report the weakest overall confidence (down five points to seven percent), reflecting firms’ more negative economic optimism and the expected impact of the UK leaving the EU.
Confidence also fell in construction (down three points to 12 percent) and retail (down five points to 11 percent).