Business confidence has risen in the South West after the Government said it would produce a “road map” out of lockdown, a new report says.
The Lloyds Bank Business Barometer showed business confidence in the South West rose two points during February to -6%. The study, from Lloyds Bank Commercial Banking, revealed companies in the South West reported higher confidence in their own business prospects month-on-month, up five points at -11%.
When taken alongside their views of the economy, down two points to -3%, this gives a headline confidence reading of -6%. When it comes to jobs, a net balance of 3% of businesses in the region expect to reduce staff levels over the next year, down 16 points on last month.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “Businesses across the region are continuing to feel the effects of lockdown, with those operating in our world-famous tourism and hospitality sectors particularly impacted
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“However, it’s encouraging to see confidence creeping upwards, likely buoyed by the prospect of restrictions easing in the months ahead – a prospect confirmed by the Prime Minister in his announcement earlier this week.
“All eyes will now be on the Chancellor’s Budget for details on new or additional business support measures. We remain by the side of firms across the South West as they navigate the road ahead.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Across the UK, overall business confidence rose in February as the Government announced it would be creating a “road map” out of lockdown.
Confidence increased by nine points to 2%, the first net positive reading since March 2020. Firms’ economic optimism also jumped 12 points month-on-month to 2%.
All UK nations and regions saw a month-on-month increase in confidence in February, with the biggest increases in the North West (13% vs -5% in January), the East Midlands (10% vs -8% in January), Wales (-5% vs -20% in January) and Scotland (-17% vs -32% in January). Despite this, four remained in net negative territory with Wales (-5%), the South West (-6%), the East of England (-8%), and Scotland (-17%) all in the red.
Confidence increased across all four broad industry sectors to the highest levels since March 2020. After a soft start to the year, manufacturing jumped by fourteen points to 5%, while construction rose eight points to 7%.
Confidence in retail extended nine points to 3%, while services advanced by ten points to 1%, led by broad-based improvements in the subsectors.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The uplift in business confidence and its entry into positive territory after nearly a year suggests that firms are cautiously pinning their hopes on economic revival in the future and the continued success of the vaccine roll-out.
“In the coming weeks, announcements in the Budget and prospects of an easing of lockdown restrictions will hopefully help to bolster the recovery in business confidence as the economy starts to reopen.”
