Business West survey reveals South West firms are confident about future prospects

By Nick Batten on 2 April, 2024

Business West’s latest Quarterly Economic Survey (QES), which polls businesses across the South West, has revealed that 63 per cent of the 268 respondents are optimistic about their own prospects, but only 16 per cent said the same for the UK economy at large.

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

Key findings 

  • Recruitment Roadblocks: A staggering 63 per cent of companies face hurdles in attracting new talent. The struggle to fill roles persists. 
  • Inflation Pressures: 35 per cent report rising prices, with labour costs (64 per cent ), utilities (46 per cent ), raw materials (35 per cent ), and fuel (26 per cent ) driving inflation.
  • Price Rise Expectations: 38 per cent 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 per cent from 7 per cent in Q4 2023, signalling market resilience.
  • Export Challenges: Export sales dip to a -4 per cent net balance, marking a downturn from previous 1 per cent . Global trade remains tough. 
  • Cash Flow Concern: Cash flow net balance falls to -1 per cent , highlighting liquidity challenges for businesses. 
  • Turnover & Profit Optimism: 60 per cent expect turnover improvement, 44 per cent 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 per cent , matching the net balance for office and property space investments. More significantly, investment plans in training and research and development are up by 8 per cent and 6 per cent , 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.” 

Fiona Scott of Scott Media, Swindon, added, “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.” 

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Pictured above: Matt Griffith, Director of Policy at Business West