Business confidence in the South West has risen by 26 points to its highest level in 2023.
At 47% during October, this is the highest level so far this year, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the South West reported higher confidence in their own business prospects month-on-month, up 25 points at 51%. When taken alongside their optimism in the economy, up 27 points to 43%, this gives a headline confidence reading of 47%.
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Business in the region identified their top target areas for growth in the next months as investing in their teams, at 49%, 33% referenced evolving their products and services while 28% looked to introduce new technology.
The Business Barometer surveys 1,200 businesses monthly, providing early signals about the Ƶ's economic trends both regionally and nationwide. A net balance of 29% of businesses in the South West said they expect to increase staff levels over the next year, up 19 points on last month.
Overall Ƶ business confidence rose three points in October from 36% to 39%, and firms’ outlook on the overall Ƶ economy increased four points to 34%. Businesses’ confidence in their own trading prospects also continued the upward trend, rising four points to 45%.
Amanda Dorel, regional director for the South West at Lloyds Bank Commercial Banking, said: “It’s brilliant to see the region’s confidence reaching a record level for 2023, with so many firms expecting trading to increase in the coming months.
“As businesses enter the final quarter of the year, it's important they engage with their customer base early to capitalise on any eager shoppers looking to take advantage of tapering inflation. Those who keep a close eye on margins and mange working capital effectively will enter the Christmas trading period ahead of the pack.”
Hann-Ju Ho, senior economist Lloyds Bank Commercial Banking, added: “Business confidence this month reflects a more positive outlook as we head into the important festive period, with trading prospects and economic optimism both at their second highest levels this year. The level also underlines the wider upward trend of steadily rising confidence in 2023. If you look at the year in quarterly time periods, confidence has steadily risen from 20% in the first quarter, 26% in the second and in September an average of 27% in the third.
“However, our data shows that firms are still safeguarding their profit margins in response to the possibility of interest rates remaining high, wage increase pressures, and the prospect of higher energy prices again this winter.
“Therefore, businesses will be keeping a keen eye on the forthcoming Autumn Statement and Bank of England policy announcements as they navigate through a challenging economic period ahead.”
