Business confidence in the South West rose 16 points during October to 15%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the South West report higher confidence in their business prospects, which rose 10 points to 20%, and higher economic optimism, which leapt 21 points to 10%. Together, this gives an overall confidence of 15%.
Businesses’ growing confidence was reflected in their hiring intentions, with a net balance of 16% of businesses in the region expecting to hire more staff during the next year, up 17 points on last month.
Across the UK, overall confidence rose four points to 6% as firms’ confidence in their own prospects climbed two points to 15%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before the government announced its new deal on the UK’s departure from the EU.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “After a sharp decline in September, overall confidence for firms in the South West has seen a significant rebound.
“The South West is a strong and resilient UK region and firms are readying impressive hiring plans. We are here by the side of businesses as they continue to strive for success, bolstering both the local and national economy.”
Across the region, a net balance of 28% 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, up 9 points on a month ago.
Businesses in the West Midlands showed the most confidence, at 16%, ahead of the South West at 15%, and East Midlands (13%).
Those in Scotland were the least confident, with an overall confidence of -3%, nine points below the national average.
Meanwhile, overall business confidence improved in all four broad sectors, with the largest increases being in the construction sector, which rose eight points to 18% and the manufacturing sector, which increased seven points to 5%.
Despite confidence in the services sector rising for the first time since June, by three points to 0%, overall confidence remained the weakest in this sector, while confidence in the retail sector saw a small increase of one point to 15%.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “Both business confidence and optimism about the wider economy have picked up this month, with economic optimism reaching a three-month high as concerns about the impact of the UK leaving the EU eased. However, there was a slight step down in hiring intentions, which could reflect concerns about ongoing economic uncertainty.”