Region 's business confidence remains among highest in UK - Lloyds

Business confidence in?the West Midlands?rose 11 points?during?May to?53 per cent, second only to London of all UK regions and nations, according to the latest Business Barometer from?Lloyds Bank Commercial Banking.??

Companies?in the region?reported?higher confidence in their?own?business prospects?month-on-month,?up 21 points at 61 per cent - the biggest rise in the UK.

When taken alongside their?optimism in?the economy,?down one point to 43 per cent, this?gives a headline confidence reading of 53 per cent.?

West Midlands businesses identified a range of growth opportunities for the next six months, including evolving their offer with new products or services (41 per cent), hiring new employees and investing in the development of their existing teams (40 per cent) and entering into new markets (38 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 31 per cent of West Midlands businesses expect to increase staff levels?over the next year, down 13 points on last month.??

Overall UK business confidence increased by five points during May to 38 per cent - its highest level since February.

Firms ' outlook on their future trading prospects rose three points to 42 per cent, and their optimism in the economy increased seven points to 33 per cent.

The net balance of businesses planning to create new jobs also increased by 11 points to 37 per cent.

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “With confidence among West Midlands businesses rising for a second consecutive month, it 's clear that, despite the challenging environment, the region 's firms are looking forward with optimism and identifying new opportunities for growth.

“Firms looking to expand their geographical footprint in particular should be getting ahead of the game by looking at the best markets for the products and services they offer, and ensuring they are clued up on how they might need to adjust their operations to succeed.

“At the same time, all companies should now be taking the opportunity to review how they 're managing their working capital - the amount of money tied-up in the day-to-day operation of their business.

“Optimising factors such as supplier and customer payment times and stock levels are both steps firms can take now to help ensure they have the cash they need, when they need it, to make the most of future demand.

“Whatever they want to achieve, we will be by the side of businesses across the region to help them realise their growth ambitions. ”

From a sector perspective, retail confidence fell two points to 27 per cent, remaining lower than the all-sector average of 38 per cent in the last three months.

The confidence level is also the lowest since March 2021 as pressure on household real incomes weigh on spending prospects.

In contrast, there was a 21-point rise in construction to 54 per cent, while manufacturing sentiment remained resilient, up two points to 45 per cent.

Confidence in the services sector reached a three-month high, increasing four points to 36 per cent.