South West firms’ confidence rebounds faster than other UK regions’, new survey shows

August 4, 2023

Confidence levels among businesses in the South West have bounced back from the gloom of earlier this year – making the region one of only two to register an increase in optimism.

Overall confidence rose five points last month to 34%, while companies in the region became far more upbeat about their own business prospects month-on-month, up 13 points at 47%.

The West Midlands was the only other region where confidence also increased last month – although its two points rise was lower than the South West’s.   

Despite firms’ optimism in the economy falling by three points to 20%, when taken alongside the rising confidence levels, the South West’s headline reading came in at 34%.

The findings, from Lloyds Bank Commercial Banking’s latest Business Barometer, show a continued – if fragile – recovery in optimism among firms in the South West. 

Confidence levels in the region have fluctuated over the past few years as the UK’s economy has undergone seismic changes.

The region’s firms were particularly pessimistic last year, and although the outlook was brighter in the run-up to Christmas, it fell again in January and February before recovering in the spring.

The latest Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide, shows further improvement in the South West at a time when confidence in nine of the UK’s 11 regions is declining.

The survey shows the top target areas for growth in the next six months for South West businesses are investing in sustainability (35%), investing in their teams (32%) and evolving their product or service offering (30%).
Firms in the region are also more upbeat about recruitment, despite spiralling wage inflation and ongoing skills shortages.

A net balance of 38% of businesses expect to increase staff levels over the next year, up 25 points on last month, according to the Business Barometer.

Across the UK as a whole, business confidence dipped by six points to 31% in July, with optimism in the economy dropping 11 points to 21% – the lowest levels since February.

While confidence levels among South West firms have recovered as those in most other regions have eased back, they are still lower.

The North East reported the highest levels of business confidence at 43% (down four points on last month) compared to the South West’s 34%, followed by Yorkshire (down seven points month-on-month) and the West Midlands (up two points month-on-month) both at 38%.

Confidence levels measured by sector also reflected the fragile economic outlook, with only retail registering higher confidence – up six points to 35%.

The fall in confidence last month was led by the service sector – down seven points to 30% – with  manufacturing down 16 points to 34% and construction down eight points to 31%.

Lloyds Bank Commercial Banking South West director Amanda Dorel, pictured, said: “It’s encouraging to see the region’s firms bucking the national trend with confidence among South West businesses bouncing back July.

“It’s great to see too that many businesses across the region are seeking opportunities to grow, with their sights set on exploring sustainability and investment in their teams.

“To remain resilient to short term economic turbulence, and achieve their growth ambitions, businesses should keep a close eye on their cash flow and working capital. This will give them the flexibility to react to opportunities and challenges as they arise.”

Comments are closed.


Reach tens of thousands of senior business people across Bristol for just £120 a month. Email for more information.