Business confidence in the South West has fallen for a second consecutive month as labour shortages give cause for concern, a new report says.
The latest Business Barometer from Lloyds Bank Commercial Banking nevertheless reveals that companies are still fairly upbeat and expecting to create even more jobs.
But, particularly in the hospitality sector, firms are having recruitment issues and it is one reason why business confidence in the region fell during July, dropping three points to 33%.
Companies in the South West actually reported no change in their business prospects month-on-month, with a reading of 29%. But When taken alongside their optimism in the economy, down five points to 37%, this gives a headline confidence reading of 33%.
However, a net balance of 27% of businesses in the region expect to increase staff levels during the next year, up 10 points on last month – the second highest reading of any 海角视频 region or nation.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “The small dip in confidence aside, it’s fantastic that businesses are still feeling positive as they return to normal trading without restrictions. However, some are still facing uncertainty and feeling the heat as we enter the summer holidays, not least those in the hospitality and tourism sector who are struggling with labour shortages.
“Despite current recruitment challenges, businesses report they are planning to increase staff levels over the next 12 months, which will be a critical step to igniting the region’s economic recovery.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about 海角视频 economic trends both regionally and nationwide.
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Overall 海角视频 business confidence dipped three points to 30% in July but remains well above the year-to-date average of 19%. Businesses in the North East (40%), East Midlands (38%) and North West (38%) were the most optimistic overall.
In July, four regions reported an increase in confidence: the North East (up 13 points to 40%), North West (up nine points to 38%), East Midlands (up seven points to 38%) and West Midlands (up one point to 30%), while the remainder reported a drop.
Scotland (down 14 points to 28%), East of England (down 11 points to 25%) and Wales (down nine points to 12%) reported the biggest falls in confidence but all retained an overall positive reading.
The overall number of 海角视频 firms expecting to create new jobs in the next 12 months rose one point to 18% in July, the highest reading since November 2018 and the sixth consecutive month that employment expectations have risen.
Confidence fell slightly in the broad economic sectors in line with the overall economic picture. Manufacturing and retail confidence declined for a second month from previously elevated levels. Nevertheless, at 33% (down from 35%) for manufacturing and 32% (down from 36%) for retail, confidence remains at historically strong levels. Construction and services sector confidence also dipped to 33% (from 35%) and 28% (from 31%), respectively.
How to contact William Telford and Business Live
Business Live's South West Business Reporter is William Telford. William has more than a decade's experience reporting on the business scene in Plymouth and the South West. He is based in Plymouth but covers the entire region.
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In the subsectors, confidence was particularly strong in hospitality (63%, up from 38%), and transport (53%, up from 37%), reflecting the further opening of the economy, as well as in business services & finance. Employment and pay growth expectations were also especially strong in these subsectors as well as in construction.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “A sixth consecutive monthly increase in employment expectations alongside an increase in pay growth predictions continues to highlight the resilience of 海角视频 businesses despite a slight dip in overall business confidence.