Business confidence continues to weaken in the south west and according to the latest ICAEW/Grant Thornton Business Confidence Monitor (BCM) confidence index is now barely positive.
This will be uncomfortable reading for businesses in the region as issues such as the EU referendum and slackening Chinese growth undermine confidence.
Key findings for Q2 2016:
- A Confidence Index score of +3 was recorded in the south west, dropping from +20.2 over the last year
- Domestic sales growth in the region has more than halved to 2.6% year on year in Q2 2016 from 5.9% 12 months ago
- Capital investment annual growth decreases further to 1%, a fall from increases of above 3% in the second part of last year.
Jon Blake, ICAEW south west regional director, said: “It is not surprising that confidence in the south west has taken a further fall this quarter, as uncertainties prevail. With large retail and tourism sectors, the region is heavily influenced by consumer spending patterns. It is likely that the slowdown in the south west domestic sales is linked to the national slowdown in retail sales growth.
“Business confidence is fragile and there are challenges ahead for the region. The forthcoming EU Referendum means a testing time, as businesses cannot plan ahead with confidence. The next quarter could be decisive in terms of a return to a trend for growth and the economy going forward.”