Covid-19 vaccine developments are giving companies in the West of England "hope" for next year but there are still concerns tough lockdown restrictions could hinder trading, a new report has found.
Companies in the South West reported higher confidence in business prospects month-on-month, at -13 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking. When taken alongside views of the economy overall, this gives a headline confidence reading for the region of -17 per cent.
When it comes to hiring intentions, a net balance of 14 per cent said they expected to reduce staff numbers over the next year - up six points on last month.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “Encouraging vaccine developments have given hope that businesses can return to some sort of normality next year, and we could see confidence continue to rise in the months ahead as a result.
“But there’s still a challenging winter to endure. The prospect of tougher regional lockdown measures over the festive period could further hinder firms’ ability to trade effectively – especially those in the tourism and hospitality sectors that are so important to our region’s economy."
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends regionally and nationally.
At UK level, the report tracked a dramatic increase in business confidence after the announcement on November 9 that the Pfizer and BioNTech vaccine has 90 per cent efficacy against Covid-19.
Firms surveyed after the announcement between 9 and 16 November had an overall confidence of -15 per cent, which was seven points higher than those polled before, between the 2 and 8 November (-22 per cent).
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, added: “Firms across the sectors also continue to remain cautious as they prepare for a new trading relationship with the EU.
"However, confidence increased following the news of a potential vaccine to help combat the virus. The months ahead will be key for businesses as they navigate the winter months and adapt to the evolving landscape.”
