More businesses in the South West are planning to create jobs as the easing of retail and hospitality restrictions makes them the most upbeat in the whole UK, a new report says.
The latest Business Barometer from Lloyds Bank Commercial Banking reveals that business confidence in the region soared 22 points during April to 30%, the highest increase across all UK regions and nations.
Companies in the South West reported higher confidence in their own business prospects month-on-month, up 27 points at 26%. When taken alongside their optimism in the economy, up 17 points to 34%, this gives a headline confidence reading of 30%.
And when it comes to jobs, a net balance of 1% of businesses in the region expect to increase staff levels over the next year, up nine points on March, and the first net-positive reading for a whole year.
Overall UK business confidence surged 14 points in April to 29%, the highest reading since September 2018 and came as the Government’s roadmap progressed with restrictions easing for non-essential retailers and outdoor hospitality.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “It’s encouraging to see business confidence surge in the South West, with more firms planning to create jobs rather than cut them in the next 12 months.
“Our region’s world-class tourism and hospitality industry has been buoyed by the phased reopening of the economy, with businesses gearing up to resume indoor services in the coming weeks, which may serve to boost confidence further. We will remain by the side of South West firms as they continue to navigate the road ahead.”
The result follows the reopening of outdoor hospitality venues and non-essential retail and personal services providers in England and comes ahead of further lockdown restrictions easing in Wales and Scotland.
Firms’ confidence in their own business prospects rose by 14 points to 26%, and their optimism in the economy increased by 15 points to 32%.
Most UK regions and nations reported a month-on-month increase in confidence during April, alongside the South West, the largest surges were reported in London (up 20 points to 32%), the East Midlands (up 20 points to 40%) and Yorkshire and the Humber (up 20 points to 32%).
No nation or region reported a fall in confidence, and nowhere had a net-negative confidence reading for the first time since July 2019. Confidence increased in all sectors, with manufacturing and retail confidence levels at three-year highs.
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Manufacturing stood out as the most positive sector (40%), likely reflecting strong global demand and notwithstanding ongoing supply chain issues.
Meanwhile, retail confidence jumped to 39%, while construction confidence also increased to 28%. Services confidence rose to 25%, which was also the highest it has been since 2018.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “A third consecutive monthly rise in business confidence alongside the highest level of confidence for two-and-a-half years tells us a positive story about the UK’s continued economic recovery and leaves us optimistic about the road ahead.
“While uncertainties remain regarding the evolution of the pandemic, this month’s improvement in sentiment reflects a further easing of Covid-19 restrictions, while progress in vaccine deployment is raising hopes that the negative impact of the health crisis will continue to fall in the months ahead as the economy reopens.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
