A new Business West survey suggests a burgeoning confidence among more than 400 firms who took part.
Business West which represents the interests of the region's businesses, has pointed out that it collected its responses before the four-week delay to covid regulation 'Freedom Day' was announced.
The organisation found that the challenge for many businesses, which could constrain the region’s recovery, is to recruit and retain staff, with 62 percent reporting problems in finding the right skills to grow.
Q2 saw a bounce back in domestic sales compared with the previous quarter, with 42 percent of businesses reporting that demand for their products and services had grown, with orders following the same path.
Business West managing director Phil Smith said: "After 15 months in the doldrums, finally we have some positive news to report, with renewed optimism in the South West economy.
“Nearly half of all businesses felt that the prospects for the UK economy were positive, and an even higher proportion - 68 percent - said that they were feeling confident or very confident about their own businesses’ prospects over the next 12 months.
"This is quite a remarkable turnaround from the height of the pandemic when South West business confidence was at its lowest ebb.
“The sudden resurgence of business activity has meant that businesses who need to recruit are confronted by a tight labour market, especially for skilled staff.
“At a busy time for many of the region’s businesses it is pleasing to see that the majority recognise the threats and opportunities presented by climate change, but with many adaptations and investment needed now there are concerns about how these will be funded in the short term.”
Net domestic sales are in positive territory for the first time in a year, whereas export sales and orders are lagging behind - still dragged down by Brexit-related issues and international travel restrictions.
The gradual unlocking of the UK economy has led to an uptick in the jobs market, evidenced by the fact that nearly half of all business quizzed tried to recruit staff during the past three months.
Businesses identified emerging post-pandemic and post-Brexit labour market trends, in addition to a heightened competition for talent spurred by the economy’s unlocking, as being to blame for their difficulties.
The full survey report, which gives an unparalleled insight into the business environment throughout the South West, can be found here https://www.businesswest.co.uk/resources/quarterly-economic-survey-q2-2021