The “Boris bounce” may be starting to fade as business confidence dips in the South West – but it remains higher than during the Theresa May era and jobs are still being created.
The Lloyds Bank’s Business Barometer for February 2020 showed business confidence in the South West fell 10 points during February to 24%, but remained above the UK average.
Companies in the region reported lower confidence in their business prospects, which fell seven points to at 22%, and lower economic optimism, which fell 13 points to 26%. Together, this gave an overall confidence of 24%, which remains among the highest levels seen since June 2018.
Meanwhile, businesses’ hiring intentions held firm with a net balance of 12% of businesses in the region expecting to hire more staff during the next year, the same as the previous month.
Across the South West, a net balance of 4% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity. This compares to 2% expecting it to have a positive impact the month before.
David Beaumont, regional director for South West at Lloyds Bank Commercial Banking, said: “Even with this dip, it is great to see that confidence levels in the South West remain among the highest levels seen in the last two years.
“It’s encouraging to see such a robust, positive attitude towards firms’ business prospects and the state of the economy generally – which spells good news for the region’s prosperity.
“We’re also pleased to see positive steps made with the Great South West initiative, which the region expects to generate 190,000 jobs. This will not only boost the economy, but economic morale across the South West.
“We’ll continue to be by the side of the region’s businesses and anticipate lending up to £1.5billion to them during 2020, as part of our wider national commitment to helping Britain prosper.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Across the UK, it found overall confidence was unchanged on in February at 23% as firms’ optimism in the economy and confidence in their own prospects held steady.
Businesses in London had the highest confidence at 29%, ahead of the West Midlands at 28%, and the East Midlands at 27%.
Those in Wales were the least confident, with an overall confidence of -2%, 25 points below the national average.
In February, overall business confidence fell slightly in the services sector from 19% to 21% but remained significantly above the 4% level at the end of 2019.
Confidence in the manufacturing sector bounced back by 10 points to 31%, while the construction and retail sector increased by two and six points 29% and 30% respectively.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The buoyed sustained results signal a return to economic growth for the first quarter of 2020 after a relatively flat final quarter end to 2019.
“The third consecutive rise in trading prospects and a swing to positive sentiment on the expected impact of leaving the EU are all tentative signs of improvement after the soft end to last year.”
