South West business confidence still healthy, despite small decline - Lloyds Bank

By Peter Davison

3 July 2023

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Amanda Dorel

Business confidence in the South West fell one point during the beginning of June but remains healthy, according to the monthly Business Barometer from Lloyds Bank Commercial Banking.

The data shows that companies in the region reported lower confidence in their own business prospects month-on-month, down eight points at 34 per cent.

When taken alongside their optimism in the economy, up six points to 23 per cent, this gives a headline confidence reading of 29 per cent.

Along with London, the South West was one of only two regions to record falls this month.

Nationally, business confidence was up nine points to 37 per cent.

South West businesses identified their top target areas for growth in the next six months as investing in teams (31 per cent), diversifying into new markets and evolving their product or service offerings (both 29 per cent).

Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: "Confidence levels among the regions businesses remains strong and it's really encouraging to see firms optimistic in the UK's wider economic outlook.

"Of course, there are still headwinds for firms, particularly with sticky inflation, but there are reasons to be optimistic with some costs starting to fall and a busy summer trading period ahead.

"Hospitality and leisure firms in particular will be hoping for a long summer season of spending.

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"Those who move quickly to attract new employees in an increasingly tight labour market will be poised to take full advantage of increasing levels of trading."

Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: "Interest rate rises and cost pressures are still felt by many and we await to see the impact of the latest 50 basis point rise in base rate.

"Meanwhile, expectations for average pay growth, although down slightly this month, appear to have picked up compared with the start of the year and remain elevated relative to pre-pandemic levels.”

By Peter Davison

Peter Davison is deputy editor of The Business Magazine. He has spent his life in journalism – doing work experience in newsrooms in and around Bristol while still at school, and landing his first job on a local newspaper aged 19. By 28 he was the youngest newspaper editor in the country.

An early advocate of online news, he spent the first years of the 2000s telling his bosses that the internet posed both the biggest opportunity and greatest threat to the newspaper industry and the art of journalism. He was right on both counts.

Since 2006 he has enjoyed a career as a freelance journalist. He lives in rural Wiltshire with one wife, two children, and three cats.