Business confidence has soared in the South West as the economy begins to open up following the worst of the Covid pandemic.
Lloyds Bank’s Business Barometer for March 2021 shows that overall confidence of firms in the South West rose 14 points in a month to 8% after the Government’s “roadmap” for ending lockdown restrictions was laid out. Overall, UK business confidence surged to its highest level since February 2020.
The barometer, from Lloyds Bank Commercial Banking, was released just a week after the one-year anniversary of the first Covid-19 lockdown and showed companies in the region reported higher confidence in their own business prospects month-on-month, up ten points at -1%. When taken alongside their optimism in the economy, up 20 points to 17%, this gives a headline confidence reading of 8%.
When it comes to jobs, at net balance of 8% of firms in the region expect to reduce staff levels in the coming year, although this is down five points on February 2021.
David Beaumont, regional director for the South West at Lloyds Bank Commercial Banking, said: “The fact that business confidence in the South West has returned to pre-pandemic levels is extremely reassuring.
“The South West’s world-renowned tourism and hospitality sectors have weathered a particularly difficult year, so they will have been buoyed by the element of certainty provided by the roadmap out of lockdown.
“With the prospect of a busy staycation summer ahead, we remain by the side of businesses in the South West as they continue to recover from the effects of the pandemic.”
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Overall UK business confidence rose for a second consecutive month in March. Firms’ confidence increased by 13 points to 15%, the highest reading since February 2020, before coronavirus was confirmed as a pandemic by the World Health Organisation.
UK firms’ economic optimism also increased by 15 points to 17%, while confidence in their own business prospects jumped 10 points to 12%.
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In fact, every UK region and nation reported an increase in overall confidence during March, with most reporting a double-digit rise month-on-month.
The North East (1% to 26%), West Midlands (3% to 27%) and East of England (-8% to 12%) reported the largest increases. Scotland was the only area to remain in net negative territory despite an increase in confidence, giving a reading of -2%.
In the sectors, manufacturing and retail recorded the highest confidence levels, both at 25%, while services and construction rose to 11% and 12% respectively
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, said: “It’s been a year since the first lockdown and the surge in confidence this month tells us firms are increasingly confident about economic recovery.
“The broadly positive outlook is driven by steady vaccine deployment, the roadmap out of lockdown and the extension of Government support measures. It will be interesting to see whether the momentum for stronger business optimism is sustained in the months ahead.”
