South West business confidence takes a knock, but remains positive

Business confidence in the South West region has taken a further knock this quarter.

According to the latest ICAEW/Grant Thornton business confidence monitor (BCM), skills shortages are a greater concern for businesses in the South West compared to 12 months ago, which is likely to be impacting on growth.

Key findings for Q1 2016 included a confidence score of +9.5 was recorded in the South West, a decline from +16.7 during the same period a year ago.

31% reported that the availability of non-management skills is a greater challenge, compared to 12 months ago.

The report also found staff development growth has doubled to 3.2% since the beginning of 2015 while research and development investment growth is also up from 2.8% to 3.7%

Sales volumes in the region increased by 3.8% year-on-year rise, compared with 5.3% a year ago

Jon Blake, ICAEW Regional Director said: “Confidence has taken another tumble this quarter, but despite being much lower than a year ago, still sits in positive territory.

“A slowdown in financial performance is reflective of market pressures businesses are facing in the region. There will be challenges ahead as the EU membership reform could prove a testing time for business.”

Tim Lincoln, Head of Practice at Grant Thornton South West commented: “Skills shortages, particularly in non-management skills, risk stifling the region’s growth and are a real concern to many businesses.

“To tackle this continued investment in training and skills is a vital ingredient in boosting productivity.”