Region 's business confidence rises to second highest in UK - Lloyds

Business confidence in the West Midlands rose eight points during July to 38 per cent - the second highest 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 12 points at 36 per cent.

When taken alongside their optimism in the economy, up four points to 40 per cent, the highest in the UK, this gives a headline confidence reading of 38 per cent.

West Midlands firms identified their top target areas for growth in the next six months as diversifying into new markets (53 per cent), investing in their teams (49 per cent) and evolving their offering with new products or services (40 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 22 per cent of businesses in the region expect to increase staff levels over the next year, down 12 points on last month.

Overall UK business confidence fell three points during July to 25 per cent. Firms ' outlook on their future trading prospects was up, three points to 37 per cent, but their optimism in the wider economy dropped nine points to 12 per cent.

The net balance of businesses planning to create new jobs also decreased, seven points to 21 per cent.

Every UK region and nation reported a positive confidence reading in July, with four out of 11 recording a higher reading than last month. Along with the West Midlands, the East of England (up 15 points to 46 per cent) and Wales (up seven points to 30 per cent) saw the biggest increases month-on-month, with the East now the most optimistic region overall.

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It 's encouraging to see that West Midlands businesses have recorded a higher confidence reading this month, which demonstrates the resilience firms here are showing against a challenging economic backdrop.

“The start of the hotly-anticipated Commonwealth Games will hopefully provide a further boost, as the hard work of many of our businesses comes to fruition.

“To make the most of the considerable influx of visitors over the next couple of weeks, West Midlands firms need to prioritise good cashflow management to be able to respond to the expected uptick in demand. ”

Business confidence declined across all four of the sectors in July, reflecting lower optimism about the economy. Confidence within manufacturing declined the most this month (20 per cent/-12), with firms citing moderating trading prospects and a notable drop in economic optimism, but also issues with inflation and supply bottlenecks.

There were small falls in confidence for construction (28 per cent/-2), retail (25 per cent/-6) and services (24 per cent/-1).