South West firms have zero confidence in future as Brexit drags on, survey shows

May 31, 2019

Business confidence among firms in the South West has slumped to zero with many blaming Brexit for having a negative impact on their activity.

The South West is now among the most pessimistic regions of the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking. 

The alarming results show that overall confidence of firms in the South West fell nine percentage points to just zero in May compared to April.

Firms’ confidence in their own business prospects was 11%, compared with 20% the previous month.

This, taken together with businesses’ views on the economy overall, gives the overall confidence reading.

While the outlook on employment is more encouraging with businesses’ hiring intentions for the next year showing a net balance of 8%, it is still down nine percentage points on last month.

A net balance of 22% of businesses said they felt that the UK’s exit from the EU was having a negative impact on their expectations for business activity – down eight points on a month ago. The barometer is the latest in a string of surveys showing a slump in business confidence linked to Brexit.

Last month the results of latest quarterly survey by Business West, the region’s largest business organisation and the body behind Bath Chamber of Commerce, showed confidence levels among West of England firms had dropped significantly – with orders and sales also down.

All measures in the survey of around 500 firms were in the red. Export sales and orders plummeted by 24% over the past year, while UK orders were 10% lower year on year. 

UK sales during the period were down 7% on the previous quarter and 8% on the previous year. Business confidence fell by 6% on the previous quarter and by 16% over the year.

Lloyds’ Business Barometer questions 1,200 businesses across the UK – 112 in the South West – monthly and so provides early indications of UK economic trends both regionally and nationwide.

Lloyds Bank Commercial Banking South West regional director Adam Rainey said: “After experiencing an uplift in confidence last month, it is disappointing to see firms’ sentiment slip this month, though this is in line with the national trend.

“We know that South West businesses continue to harbour ambitions for growth and it’s important that management teams remember there is support on hand.”

Across the UK, overall confidence slipped four points to 10% as firms’ confidence in their own prospects fell six points to 17% while their economic optimism dropped two points to 2%.

Businesses in Yorkshire and the Humber are the most confidence, at 23%, ahead of the West Midlands at 21%

Those in the East of England are the least confident, with an overall confidence of minus 9% – 19 points below the national average.

Lloyds Bank Commercial Banking senior economist Hann-Ju Ho said: “Overall business confidence continues to sit below the long-term average. A slight dip in confidence this month appears largely to reflect companies’ assessment of their own trading prospects for the coming year, and the anticipated impact of the UK leaving the EU.

“It’s encouraging to note that while we are seeing uncertainty impacting business confidence overall, optimism regarding the wider economy remains broadly steady.”

The overall ‘balance’ of opinion in the barometer weighs up the percentage of firms that are positive in outlook against those that are negative.


Comments are closed.


Reach tens of thousands of senior business people across the Bath area for just £75 a month. Email for more information.