Business confidence in SW falls

The Business in Britain report, now in its 24th year, gathers the views of 1,500 UK companies, predominantly small to medium sized businesses, and tracks the overall “balance” of opinion on a range of important performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

Since the last report in July 2015, business confidence in the South West - an average of respondents’ expected sales, orders and profits over the next six months -  has declined to 40 per cent, down from 49 per cent. However the index remains close to its recent highs and above its long term national average of 24 per cent.

Just under a third of firms (31 per cent) in the South West identified weaker UK demand as the main threat to their business over the next six months - a rise from 28 per cent in July. This was closely followed by a rise in the proportion of businesses who cited accesses to skills as the biggest threat to their business – a rise from 10 per cent to 20 per cent.

The net balance of exporters expecting an increase in total exports across the globe stayed the same at 29 per cent.

David Beaumont, area director, SME Banking in the South West, Lloyds Bank Commercial Banking said: “Business confidence has slipped back slightly as companies in the South West see slowing demand as a big threat to their business in 2016, both at home and abroad.

“Global economic conditions are causing concern in the short term, with Sterling’s strength against the Euro causing issues for exporters. However confidence levels remain close to their recent highs, especially on the back of three years of economic growth.

“Businesses in the South West should continue to be prepared for interest rate rises and currency fluctuations, with the recent decision by the US Federal Reserve a reminder that this benign environment is not here to stay. Lloyds Bank is playing its part in helping Britain prosper by supporting businesses to start up, scale up, trade overseas and manage their risks. Businesses have good reasons to remain confident as the long-term health of the UK continues to improve.”

National sector picture

Retail & wholesale activity has strengthened

Business confidence for the next six months fell in every sector with the exception of retail & wholesale. The biggest decline was in the manufacturing sector where confidence dropped 14 points to 37 per cent - its lowest level since mid-2013, reflecting the expected difficulties for exporters.

Regional picture

Overall confidence is lowest in the North East, Wales & Scotland

Overall business confidence declined in nine regions but rose in the North West and in Gloucester, Oxford & the South Midlands. The largest decline in confidence was in the South East (down 18 points to 34 per cent), and Scotland (down 14 points to 31 per cent).

Overall business confidence is lowest in Wales, the North East, and Scotland, while it is highest in Yorkshire & the Humber, and Gloucester, Oxford & the South Midlands.