Business confidence down but region 's firms remain among most positive - Lloyds

Business confidence in the West Midlands fell 12 points during August to 26 per cent, but remained among the highest in the UK, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the region reported lower confidence in their own business prospects month-on-month, down 35 points at one per cent.

When taken alongside their optimism in the economy, down 14 points to 26 per cent, this gives a headline confidence reading of 26 per cent.

West Midlands businesses identified their top target areas for growth in the next six months as evolving their offering (41 per cent), investing in their teams (37 per cent) and diversifying into new markets (21 per cent).

The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

A net balance of 10 per cent of West Midlands businesses expect to increase staff levels over the next year, down 12 points on last month.

Overall UK business confidence fell nine points during August to 16%, its lowest level since March 2021.

Firms ' outlook on their future trading prospects was down 32 points to five per cent, and their optimism in the wider economy dropped six points to six per cent.

The net balance of businesses planning to create new jobs also decreased five points to 16 per cent.

While every UK region and nation reported a positive confidence reading in August (except the South East, where confidence dropped 15 points to 0 per cent), only three recorded a month-on-month increase in optimism.

The three regions were the North West (up 26 points to 44 per cent), South West (up 12 points to 23 per cent) and Yorkshire (up nine points to 23 per cent), with the North West now the most optimistic region overall.

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Despite the challenging trading conditions firms are currently operating in, West Midlands businesses are among the most confident in the UK for another month.

“This is testament to the way they are continuing to identify opportunities for growth, such as investing in new products and services to meet the changing demands of their customers.

“To ensure they have the working capital needed to respond to any opportunities to scale up, the region 's firms should consider the variety of financial products on offer, such as asset-based lending or invoice finance, to help reduce any disruption to cash flow so they can continue to push for growth. ”

Business confidence declined across all four of sectors in August.

Confidence within the retail sector declined the most this month (13 per cent, down 18 points), with the service sector also seeing a significant nine-point decrease (15 per cent).

Other sectors saw moderate decreases, with manufacturing down by four points (16 per cent) and construction (26 per cent, a fall of two points), in line with recent trends.