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Economic confidence in South West bounces back in June

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Adam RaineyAdam RaineyBusiness confidence in the South West increased by eight points during June to eight percent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the South West report higher confidence in their business prospects, which rose four points to 15 percent, and higher economic optimism, which rose 12 points to one percent. Together, this gives an overall confidence of eight per cent.

Businesses’ hiring intentions show a net balance of six per cent of businesses in the region expect to hire more staff during the next year, down two points on last month.

Across the UK, overall confidence grew three points to 13 percent as firms’ confidence in their own prospects grew five points to 22 percent, while their economic optimism also grew by three points to five 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: “It is encouraging to see firms’ confidence rise this month after a downward blip in May, as the resilience of the region’s business community has prevailed again.

“We are here to stand by the side of businesses as they navigate their way through any current uncertainties towards reaching their long-term growth potential. This is why we have pledged to lend £1.5billion to South West companies this year.”

Across the region, a net balance of 24 per cent of businesses said they feel that the UK’s exit from the European Union is having a negative impact on their expectations for business activity, up two points on a month ago.

Nationally, businesses in the West Midlands show most confidence at 25 percent, ahead of those in London, at 18 percent. The least confident businesses were found in Yorkshire and Humber with an overall confidence of five percent, down 18 points and eight points below the national average.

Business confidence increased in the retail sector, up by 11 points to 22 percent. Gains were also seen in construction, up five points to 17 percent, and in the services sector, up five points to 12 percent.

In contrast, confidence in the manufacturing sector fell by 11 points, bringing June’s figures back in line with the low seen earlier this year.

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking said: “While overall business confidence is still below the long-term average, it is encouraging to see a rise for the third time in four months since the low in February.

“Firms are showing more optimism both in their trading prospects and the overall economy, with levels rising in the retail, construction and services sectors this month. Ongoing global trade tensions, however, appear to have weighed on manufacturing confidence.”