• Swindon & Wiltshire Economy
• Thursday December 21 2023
• Author Name: Peter Davison

South West businesses resilient in the face of ongoing challenges – Business West

Six in ten businesses in the South West say they are confident about their prospects over the next 12 months, according to new research by Business West as part of the British Chambers of Commerce Quarterly Economic Survey.

Business West’s latest Quarterly Economic Survey (QES), which polled 301 businesses across the South West, reveals general economic conditions were the main source of concern (69 per cent) for respondents.

Over the past year, the QES results have consistently revealed a disparity in confidence levels between businesses’ own prospects and their outlook for the broader UK economy.

This trend persisted in Q4, with businesses expressing significantly higher confidence in their own growth potential compared to the national economic outlook.

Concerns about the national economy continue, with only 19 per cent of businesses expressing confidence in the UK’s economic outlook. Interest rates and the labour market remain among the top sources of concern for businesses.

The labour market remains a challenge, with 71 per cent of respondents reporting difficulties in finding suitable staff. Skilled manual/technical and professional/managerial positions are particularly challenging to recruit for.

Hiring activity increased in Q4, with 22 per cent of participants reporting increases in their staff.

The net balance of UK sales and orders returned to positive territory in Q4 (seven per cent and two per cent, respectively), indicating a recovery in domestic demand. Service sector businesses and manufacturers both reported improved domestic sales performance in Q4.

International trade performance also returned to positive territory in Q4, with both export sales and orders reaching a net balance of one per cent.

Exporting manufacturers reported a net balance of international sales of five per cent, suggesting a stronger recovery in the manufacturing sector.

Business profitability expectations for the next 12 months remained positive, with almost half (48 per cent) of participants anticipating improvement in their margins.

Matt Griffith, director of policy at Business West, said: “It’s certainly encouraging to see the resilience and adaptability of the steely-nerved South West business owner.

‘It is a really challenging time for business owners across our region, yet the majority are confident in their own prospects.

“The easing of inflation and a potential peak in UK interest rates seem to have helped business sentiment, but stubborn labour market issues are persisting, making it harder for firms to grow and invest.

“It’s good news too that the net balance of UK sales and orders, and international trade performance, have finally returned to positive territory after two years.

“However, there is a real lack of confidence in the UK’s economic outlook. Our survey clearly demonstrates the need for a more stable and supportive business environment.”