Region 's business confidence slips into red amid national lockdown

Business confidence in the West Midlands has dropped back into negative territory, according to a new economic report.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, confidence in the region has fallen eight points during January to -4 per cent.

Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up five points at 6 per cent.

However, when taken alongside their views of the economy, down 21 points to -13 per cent, this gives a headline confidence reading of -4 per cent.

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

Almost two thirds (61 per cent) of firms said current Covid-19 restrictions had caused a fall in turnover, but they expected the effects of the vaccine programme to boost trading prospects for 2021, with 50 per cent saying the rollout had made them feel more confident about the year ahead.

However, only 14 per cent expect trading levels to return to pre-pandemic levels in the next twelve months.

When it comes to jobs, a net balance of 14 per cent of businesses in the region expect to reduce staff levels over the next year, up 20 points on last month.

Nationally, overall business confidence dipped in January as the third lockdown came into force, falling by three points to -7 per cent.

Firms ' economic optimism dropped dramatically month-on-month, decreasing by 34 points to -10 per cent.

Almost all UK nations and regions saw a month-on-month dip in confidence during January, with the biggest falls reported in Scotland (-32 per cent vs -9 per cent in December), Wales (-20 per cent vs -1 per cent in December) and the South West (-8 per cent vs 5 per cent in December).

However, firms reported a month-on-month increase in confidence in London (up five percentage points to 3 per cent), the South East (up seven percentage points to -4 per cent), and North West (up eight percentage points to -5 per cent). Yorkshire business confidence remained steady month-on-month at -4 per cent.

Amanda Dorel (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Firms have faced significant challenges following the latest lockdown, which has resulted in confidence falling back into negative territory this month.

“However, it 's promising to see that a large number are feeling optimistic about their prospects brightening in the months ahead now the vaccine roll-out is underway.

“We will remain by the side of businesses across the West Midlands to help them navigate the challenges they face and help them make the most of opportunities that come their way. ”