Business confidence in the South West rose 22 points during April to 30 percent, the highest increase across all UK regions and nations, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the South West reported higher confidence in their own business prospects month-on-month, up 27 points at 26 percent. When taken alongside their optimism in the economy, up 17 points to 34 percent, this gives a headline confidence reading of 30 percent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
When it comes to jobs, a net balance of one percent of businesses in the region expect to increase staff levels over the next year, up 9 points on last month, the first net-positive reading since March 2020.
Overall UK business confidence surged 14 points in April to 29 percent, the highest reading since September 2018. The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further lockdown restrictions easing in Wales and Scotland.
Firms’ confidence in their own business prospects rose by 14 points to 26 percent, and their optimism in the economy increased by 15 points to 32 percent.
Most UK regions and nations reported a month-on-month increase in confidence during April, alongside the South West, the largest surges were reported in London (up 20 points to 32 percent), the East Midlands (up 20 points to 40 percent) and Yorkshire and the Humber (up 20 points to 32 percent).
No nation or region reported a fall in confidence, and nowhere had a net-negative confidence reading for the first time since July 2019.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence surge in the South West, with more firms planning to create jobs rather than cut them in the next twelve months.
“Our region’s world-class tourism and hospitality industry has been buoyed by the phased reopening of the economy, with businesses gearing up to resume indoor services in the coming weeks, which may serve to boost confidence further. We will remain by the side of South West firms as they continue to navigate the road ahead.”
Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs. Manufacturing stood out as the most positive sector (40 percent), likely reflecting strong global demand and notwithstanding ongoing supply chain issues.
Meanwhile, retail confidence jumped to 39 percent, while construction confidence also increased to 28 percent. Services confidence rose to 25 percent, which was also the highest it has been since 2018.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead.
"While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of Covid-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”