• Swindon & Wiltshire Economy
• Friday October 25 2024
• Author Name: Peter Davison

South West businesses report cautious optimism amidst a challenging economic environment

Businesses in the South West are reporting cautious optimism, with confidence levels holding steady despite a challenging economic environment.

The results of the Quarterly Economic Survey by Business West shows business confidence at a resilient net balance of 35 per cent, while confidence in the UK economy has seen modest improvement, rising to a net balance of -12 per cent from -21 per cent in the previous quarter.

However, ongoing concerns around workforce skills shortages, profitability, and economic uncertainty persist.

The report also sheds light on businesses’ progress toward Net Zero, highlighting both awareness and the need for further action.

Other key findings include:

• Recruitment activity has remained steady, with 46 per cent of businesses seeking new staff. However, 60 per cent reported difficulties in finding suitable candidates, particularly for skilled and managerial roles
• 71 per cent of respondents reported no change in their prices over the past three months. However, it is important to note that a significant portion (25 per cent) increased their prices, while only a small minority (four per cent) reduced them.
• The domestic market returned to negative territory in Q3 2024, with a net balance of -1 per cent for UK sales.
• International sales also experienced a decline, with a net balance of -4 per cent, reflecting global challenges.
• General economic conditions and business uncertainty remain the top concerns, with 67 per cent and 49 per cent of businesses respectively
• Profitability forecasts are moderately optimistic, with 42 per cent expecting improvement, but they lag behind turnover expectations

The survey, which polled 292 businesses across the South West, also had a special focus on Net Zero.

A substantial majority (70 per cent) of respondents recognise climate change as a significant issue. However, a notable gap persists between awareness and action.

While 70 per cent acknowledge the environmental challenge, only 32 per cent have taken the crucial step of measuring their carbon footprint.

To further accelerate climate action, businesses expressed a need for additional support. Tax incentives were the most sought-after measure, with 49 per cent of respondents requesting them.

Gustavo Guntren, policy analyst at Business West, said “This is our first QES since the general election. While we’ve seen confidence in the UK economy increase modestly since then, concerns about general economic conditions and business uncertainty persist.

“It remains to be seen if next week’s budget will provide our businesses the reassurance they need.”

The local figures have been fed into the national Quarterly Business Survey from the British Chambers of Commerce – Britain’s biggest and longest-running private business survey.

The survey, a leading indicator, often picks up changes in the economy long before other surveys and official statistics and consistently mirrors trends in official data.

It remains closely watched by both UK Government and the Bank of England.

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