West Country businesses among ‘most resilient’ in UK

Businesses expect investment levels to grow over the next 12 months, but remain concerned about the economy

West Country firms are among the “most resilient” in the UK but lack confidence in the country’s economy, according to new research.

The latest Barclays Prosperity Index reported a net confidence level of 36 per cent for the region’s companies – more than 20 base points below the UK average.

But, according to the survey, South West businesses showed greater resilience in international trade activity than the rest of Britain. SME clients within Barclays Business Bank saw inbound (-0.8 per cent) and outbound (-1 per cent) international payments fall at a slower rate than the UK average.

More of the region’s companies also appear to be accessing external finance, with loan volumes rising 0.5 per cent and overdraft volumes growing 3.3 per cent.

The research suggests some of the demand for longer-term borrowing may be to support future investment plans. South West businesses expect investment levels to grow by eight per cent over the next 12 months – the strongest growth of all regions – and four percentage points higher than the UK average.

The top areas firms in the region are looking to invest in are researching and/or developing new or improved products, or services (33per cent) and new or improved digital products or subscriptions (31 per cent).

But Barclays said the stronger-than-average growth in overdraft usage could indicate that part of the increase in borrowing reflected short-term liquidity management.

James Jordan, head of region for the South West at Barclays, said: “Despite continued geo-political and associated economic uncertainty, businesses across the South West are demonstrating strong resilience and adaptability.

“Our data suggests firms are taking a disciplined approach to cash management while continuing to invest selectively in the areas that will support long-term productivity and growth.”

Nationally, geopolitical tensions have hit confidence and investment across the UK, with one in five firms (20 per cent) pausing spending plans in light of the uncertain landscape.

Meanwhile 68 per cent expect to increase cybersecurity investment over the next 12 months, but almost half (46 per cent) believe the adoption of new technologies is increasing their exposure to cybersecurity risks.

Six in 10 firms now proactively use agentic AI, with cloud, cyber and AI together accounting for 44 per cent of planned technology budgets over the next year.

Businesses of all sizes are split on their pricing strategy in response to rising costs, with 37 per cent passing them on to customers and 32 per cent absorbing the impact within margins.