Majority of South West businesses express confidence in their own prospects, with many seeking new hires

Amy Drummond
Senior Communications Manager | Business West
26th March 2024

Business West’s latest Quarterly Economic Survey, which polls businesses across the South West, reveals 63% of the 268 respondents are optimistic about their own prospects, but only 16% said the same for the UK economy at large.

Despite concerns expressed by 19% of businesses about the current labour market, a substantial 42% are actively seeking new hires. There's a prevailing sense of cautious optimism, with 60% anticipating improvements in turnover and 44% looking forward to profitability gains in the coming period.

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Fiona Scott, Scott Media, Swindon, said “It's hard to be very confident due to many external factors which are affecting business which has been a common theme this decade. It's time to dig in and keep going.” 

John Mayer, TaxAssist Accountants, North Somerset, said “I think the constant uncertainty and forthcoming election will unsettle the markets, but small businesses are pretty resilient, and we are still finding prospective clients approaching us.” 

John Spear, epi Consulting, Gloucestershire, said “We wanted to set-up a local office - with 15 highly-paid professional staff members - but haven’t been able to do that, so we’ve had to go for the work from home model. We need local policies to support building local skills pools.”

Key findings include:

  • Recruitment Roadblocks: A staggering 63% of companies face hurdles in attracting new talent. The struggle to fill roles persists. 
  • Inflation Pressures: 35% report rising prices, with labour costs (64%), utilities (46%), raw materials (35%), and fuel (26%) driving inflation.
  • Price Rise Expectations: 38% expect to further increase their prices during the next quarter, indicating continued economic pressure. 
  • Domestic Sales Boost: Significant uplift in domestic sales net balance to 18% from 7% in Q4 2023, signalling market resilience.
  • Export Challenges: Export sales dip to a -4% net balance, marking a downturn from previous 1%. Global trade remains tough. 
  • Cash Flow Concern: Cash flow net balance falls to -1%, highlighting liquidity challenges for businesses. 
  • Turnover & Profit Optimism: 60% expect turnover improvement, 44% look forward to profitability gains, underscoring cautious optimism. 
  • Investing in Growth: all investments categories measured expanded in Q1 2024 - investment plans for plant, machinery, and equipment showed a net balance of 3%, matching the net balance for office and property space investments. More significantly, investment plans in training and research and development are up by 8% and 6%, respectively. 

Matt Griffith, Director of Policy at Business West, said: “We’ve seen a trend develop over the past year where South West businesses are more confident in their own prospects, than the wider economy’s. It is encouraging to see so many companies are wanting to recruit. However, filling roles still remains a challenge. This is clearly an issue that needs to be tackled by whichever government that comes in. 

“We are concerned to see a decline in export sales, with global trade remaining tough. On the whole, businesses are having to work harder to meet their goals, especially with the uncertainty in the national economy and the overall lack of confidence among consumers and investors. However optimism is growing and businesses appear to be feeling more upbeat as we move into spring” 

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