Business confidence in the South West has, unsurprisingly, plummeted during March – but firms were being impacted by the coronavirus menace before the Government ordered a lockdown.
The new Business Barometer from Lloyds Bank Commercial Banking reveals business confidence in the region dived eight points during March to 16%.
The research, taken between March 2 and 16, showed companies in the West Country had lower confidence in their business prospects at 13% and lower economic optimism at 19%. Together, this gives an overall confidence of 16%.
Across the Ƶ, overall business confidence fell by 17 percentage points to 6% in March, the lowest level since October 2019.
Keep track of the Business Barometer...
However, the report showed that nationally, for the second week of the survey, a much sharper fall in overall confidence was recorded at -3%.
It matches the lowest dip seen by the barometer since December 2011 and is otherwise the lowest dip since March 2009 during the global financial crisis.
Responding specifically to the impact of the Coronavirus, 75% of South West businesses stated that they had already been affected or expected to be impacted, ahead of Boris Johnson’s initial call for the public to stay at home on March 16.
The data illustrates the impact that the outbreak was having on business confidence before many initiatives launched by the Government to help combat the virus were announced.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “The impact of the virus was beginning to hit South West businesses before the social distancing measures were announced by the Government and, with three quarters of the region’s firms already affected or expecting to be impacted, it is no surprise that their overall confidence and business prospects have taken a dip.
“As tough trading conditions weigh on businesses’ collective outlook, we can likely expect a more subdued picture next month.
“We are here to help our customers through interruptions they may face and as part of our anticipated £18billion of support for businesses this year, we’ve set aside £2billion of arrangement fee free finance to help small firms affected by COVID-19.
“That includes Noah’s Ark Zoo Farm in Somerset, which closed its doors during the coronavirus outbreak but has now secured a six-figure funding package to keep the more than 1,000 animals who live there healthy and happy during the lockdown.
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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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“Funding like this is also designed to help businesses manage their cashflow, which might have been affected by supply chain interruptions or employee absences. We’re also advising firms on how they can access the Coronavirus Business Interruption Loan Scheme (CBILS). We remain committed to supporting our customers in the weeks and months ahead in any way we can.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about Ƶ economic trends both regionally and nationwide.
Businesses in the North East had the highest confidence at 23%, ahead of the South West at 16%, and London at 12%.
Those in the South East were the least confident, with an overall confidence of -10%, 16 points below the national average.
In March, overall business confidence fell across all four sectors surveyed. Confidence in the retail sector saw the sharpest decline, falling 21 percentage points to 9%.
The manufacturing sector also saw a big decline from 31% to 11%, services was down 18 points to 1%, while the construction sector fell by 15 points to 14%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The results in March demonstrate the impact of the shutdown of large swathes of the economy to combat the pandemic even in advance of the Government’s stringent measures announced in recent days.
“Sentiment has returned to historic low levels after improving in recent months. We will continue to monitor what businesses are telling us, and hope that they can take steps to minimise the impact of current economic downturn.”
