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Business confidence returning to South West

12 August 2009

South West businesses say they are in a good position to weather the downturn over the coming year, according to the region's top economists.

Nearly three quarters of the businesses surveyed for the South West RDA (Regional Development Agency) in May and June believe they will survive continuing economic pressures over the next 12 months.

The figures are published in the latest edition of the South West RDA's Economics Review, which also indicates that the increase in confidence has been felt by both manufacturing and service companies across the region. The survey quoted in the Review shows that manufacturers have begun to rebuild stocks and the services sector have seen more orders being placed.

However, RDA economists remain cautious on whether this is a return to normality, as most current measures of business performance remain strongly negative. For example up to one third of business surveyed are still taking measures to cut labour costs - from shedding staff to reducing hours.

Nigel Jump, chief economist at the South West RDA, said: "We continue to be pleasantly surprised at the extent of business optimism within the region, which extends across sectors and places. However, whilst there has been a boost to South West activity from a recent bout of restocking, it is not clear that a sustained recovery is yet underway.

"There are a few short-term factors that could be seen as potential threats to the recovery within the South West, such as the levels of discretionary income and the effects of the swine flu pandemic." Mr Jump continued: "On balance, the effects of swine flu on the economy are likely to be negative but should be short-lived."

This quarter's Economics Review also contains special papers on the ramifications of the downturn for tourism in the South West, housing and the labour market.

For further information about the current economic picture in South West England, please call the press team to arrange an interview with Nigel Jump.

The full text of the review is available at Economics Review.

Ends

Notes to editors

1. The South West RDA leads the development of a sustainable economy, investing to unlock the region's business potential. It is helping companies respond to the economic crisis and charts a course for recovery. The RDA is developing or expanding initiatives which include: establishing a Business Loan Fund; coordinating the response to large companies in difficulty; preparing for economic recovery.

For more details contact: RDA Press Office, 01392 229389

Contact Details

Name: Claire Wickes
Tel: 01392 229 389
Email: claire.wickes@southwestrda.org.uk