Business confidence in the South West of England rose 21 points last month to 29 per cent, making it the most confident region in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported higher confidence in their business prospects, which rose 25 points to 42 per cent, and higher economic optimism, up 15 points to 16 per cent. Together, this gives an overall confidence reading of 29 per cent.
Businesses’ hiring intentions also got a boost, with a net balance of 24 per cent of businesses in the region reporting they expect to hire more staff during the next year, up 18 points on last month.
Across the UK, overall confidence stood steady at 13 per cent as firms’ confidence in their own prospects slipped three points to 19 per cent, while their economic optimism remained at five per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Adam Rainey regional director for the South West at Lloyds Bank Commercial Banking, said: “It is encouraging to see such a boost to confidence in the South West after a subdued couple of months.
“Businesses clearly feel bullish at the moment and are planning for growth by looking to create new jobs. Having said that, it is likely too early to think the region’s challenges have all been met.
“Whatever lies ahead, we will remain by the side of South West firms and we have committed to lending £1.2billion to local companies in 2019 to help them do just that.”
Across the region, a net balance of eight per cent 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, down 16 points on a month ago.
The UK’s regions
Following the South West, the East Midlands was the second most confident region, at 29 per cent, ahead of the West Midlands at 19 per cent.
Those in Scotland were the least confident, with an overall confidence of zero per cent, 13 points below the national average.
Manufacturing was the most upbeat sector, with overall confidence rising nine points to 19 per cent and overtaking retail, which fell five points to 17 per cent. Overall confidence among services businesses was unchanged at 12 per cent, but construction dropped 11 points to six, the sector’s lowest reading in more than 18 months.
Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said: “It is promising to see national confidence levels continuing to beat the dip seen in February despite business confidence remaining below the long-term average and overall business confidence remaining unchanged this month.
“Coupled with this, employment expectations still remain largely unchanged from last month, with only one-third of firms planning to increase their staff levels, compared with more than 40 per cent of firms last year, suggesting cautious business behaviour in the current economic environment.”