Covid-19 vaccine developments are giving companies in the West of England "hope" for next year but there are still concerns tough lockdown restrictions could hinder trading, a new report has found.
Companies in the South West reported higher confidence in business prospects month-on-month, at -13 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking. When taken alongside views of the economy overall, this gives a headline confidence reading for the region of -17 per cent.
When it comes to hiring intentions, a net balance of 14 per cent said they expected to reduce staff numbers over the next year - up six points on last month.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “Encouraging vaccine developments have given hope that businesses can return to some sort of normality next year, and we could see confidence continue to rise in the months ahead as a result.
“But there’s still a challenging winter to endure. The prospect of tougher regional lockdown measures over the festive period could further hinder firms’ ability to trade effectively – especially those in the tourism and hospitality sectors that are so important to our region’s economy."
The Business Barometer questions 1,200 businesses monthly and provides early signals about Ƶ economic trends regionally and nationally.
At Ƶ level, the report tracked a dramatic increase in business confidence after the announcement on November 9 that the Pfizer and BioNTech vaccine has 90 per cent efficacy against Covid-19.
Firms surveyed after the announcement between 9 and 16 November had an overall confidence of -15 per cent, which was seven points higher than those polled before, between the 2 and 8 November (-22 per cent).
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Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, added: “Firms across the sectors also continue to remain cautious as they prepare for a new trading relationship with the EU.
"However, confidence increased following the news of a potential vaccine to help combat the virus. The months ahead will be key for businesses as they navigate the winter months and adapt to the evolving landscape.”
