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Gloucestershire Business News

South West business confidence dips in July

Business confidence in the South West fell 15 points during July to 28%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the South West reported lower confidence in their own business prospects month-on-month, down seven points at 33%. When taken alongside their optimism in the economy, down 24 points to 23%, this gives a headline confidence reading of 28% (vs. 43% in June).

Looking ahead to the next six months, South West businesses identified their top target areas for growth as evolving their offering, for example by introducing new products or services (45%), investing in their team, for example through training (34%), and investing in sustainability (24%).

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

Overall, UK business confidence climbed nine points in July to a net balance of 50% - the same as in May when confidence reached an eight-year high.

Businesses' confidence in their own trading prospects rose 12 points to 56% - the highest reading since April 2017. Meanwhile, confidence in the economy climbed six points to 45%.

Wales and the East Midlands (both 62%) were the joint-most confident UK regions or nations in July, followed by the East of England (61%).

There was an improvement across all sector categories this month - most notably in retail which rose by 25 points to a post-pandemic high of 60%. There were also significant gains in manufacturing trading prospects, with the net balance increasing by 9 points to a two-year high. Services rose 10 points to 56%, while construction saw a more modest increase by 2 points to 44%.

Amanda Dorel, regional director for the South West, Lloyds Bank Commercial Banking, said: "While overall confidence dipped in July, it's encouraging to see South West businesses are still investing to take advantage of growth opportunities, particularly when it comes to their teams and sustainability. These are both measures that can have positive, long-term, benefits that extend far beyond businesses themselves.

"As businesses put their growth plans into action, we'll be by their side with our insight and funding. This includes discounted lending for green purposes to help make critical investments for more sustainable growth."

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: "This month shows that businesses are feeling more confident, buoyed by their positive trading prospects and economic outlook. Retail-focused businesses were the main driving force behind the positive rise in trading prospects and these results tally with the improvement we have seen in consumer confidence.

"With the data suggesting that businesses may have taken a more cautious approach in June, next month will be one to watch to see if the renewed sense of optimism continues."

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