Small business confidence in the South West has dropped again after surge of positivity earlier in the year, according to new research.
The latest regional quarterly survey by the Britain’s biggest business group, the Federation of Small Businesses, reveals a sharp decline in optimism – by 30 percentage points – over the summer. 
This is in marked contrast to the previous two quarters, when confidence levels rose to their highest levels for more than two years and lifted the South West from the least positive region in the country to above the average.
The results of the latest FSB survey, which was carried out just before and after the General Election, shows more South West business owners decreased staff numbers rather than increased them during the three months.
At the same time, two thirds regarded current economic conditions as their biggest barrier to growth, while a lack of consumer demand and higher labour costs also contributing to the downbeat mood.
The research, however, did reveal some encouraging signs, with employment trends for the next quarter looking more positive.
More than half of the firms taking part in the survey also said they aimed to grow either rapidly or moderately over the next three months, while regional investment ambitions are well above the national average.
FSB South West chair Lee Nathan, pictured, described the results as a “mixed bag”, with the dip in the headline confidence figure a genuine frustration.
“There were some positive signs in the report this time, but the big disappointment is the overall headline confidence figures,” he said.
“We all hoped the surge last quarter was an indication that a corner may have been turned.
“But the fact that confidence has slipped back should be a timely reminder to the new government that the small business community is looking to it to help improve the general economic outlook.”
The regional figures are fed into the FSB’s national survey, which painted a similar picture among small the UK’s small business owners.
Reflecting on this, FSB policy chair Tina McKenzie said she hoped the situation could be turned around again.
“The fall in confidence among small firms is disheartening, but need not become a self-fulfilling prophecy,” she added.
“With the right support, we know that small businesses can thrive and drive the economic growth that the government has said is its priority.
“The small business community is looking for reassurance from ministers that they are listening to their concerns, especially around tax and employment.”
