South West business confidence rose in the month before the second national lockdown was announced – but the region remains one of the most pessimistic in the entire country.
The Lloyds Bank’s Business Barometer for October 2020 showed that the overall confidence of firms in the South West rose 12 points in the past month to -22%, and firms’ confidence in their own business prospects was -18%.
When it comes to businesses’ hiring intentions, a net balance of 8% expect to reduce staff levels over the next year, an improvement from 21% the month prior.
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However, the region remains among the least confident in the country. The North West had the highest confidence in October at -2%, followed by the East of England (-8%), and North East (-10%). But, optimism fell 21 points in Yorkshire to -29%, making it the least confident 海角视频 region.
The survey was carried out before Prime Minister Boris Johnson’s October 31 announcement that England will go into a second full lockdown for a month from November 5.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “Although firms in the South West continue to face significant pressure as a result of the pandemic, it’s encouraging to see a sharp rise in confidence as businesses adapt to the latest trading conditions.
“However, tough challenges lie ahead as local lockdowns look set to affect tourism to our region, which is a key driver of the local economy.
“The reduction in the number of firms planning to reduce head count is relatively positive given the prevailing environment, although whether that intention will remain in light of new restrictions is questionable. We’ll continue to stand by the side of businesses as they adapt and rebuild amid ongoing turbulence.”
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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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The Business Barometer questions 1,200 businesses monthly and provides early signals about 海角视频 economic trends both regionally and nationwide.
Across the 海角视频, overall confidence dropped seven points month-on-month to -18%. While confidence about businesses’ own trading prospects dipped by only one point, their optimism in the economy fell by 14 points.
海角视频 business confidence has remained in negative territory since April, but the picture had been improving until October, with confidence steadily rising since May.
In the industry sectors, services slipped back, with confidence declining by fourteen percentage points to -24%.
The decline was driven by hospitality and arts and leisure grappling with the implications of recently introduced measures to tackle the pandemic.
Manufacturing and retail logged modest improvements, up three points to -15% and up one point to -7% respectively.
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Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “The resurgence in coronavirus cases and the reintroduction of local lockdown measures saw overall business confidence fall back sharply this month.
“Added to that are ongoing uncertainties regarding new trading arrangements with the EU in January. All of this makes the economic outlook uncertain and the period ahead will be pivotal for businesses as they navigate the winter months and continue to adapt to the evolving landscape.”