‘Resilient’ West Midlands firms reporting strong demand levels - Barclays
Businesses across the West Midlands are demonstrating resilience despite persistent cost pressures and economic uncertainty, with confidence in their own prospects remaining strong, according to Barclays’ Q1 2026 Business Prosperity Index .
Barclays’ research shows that 59 per cent of businesses in the region reported stronger than normal demand levels, a 20 per cent lead over the rest of the UK (39 per cent).
However, business remained cautious about the outlook, with many citing economic uncertainty (39 per cent) and elevated cost pressures (32 per cent) as key concerns
Firms are split on their pricing strategy in response to rising costs, with 41 per cent passing them on to customers and 39 per cent absorbing the impact
Meanwhile over four in five (80 per cent) expect revenues to increase next quarter as 87 per cent are confident in their prospects over the next year
Looking ahead, more than half (57 per cent) are planning to increase investment in the next 12 months
Anonymised Barclays client data from over 59,000 West Midlands firms shows SME cash inflows into Barclays Business Banking accounts rose +0.1 per cent, while larger corporates within Barclays UK Corporate Bank saw cash flows decline 5.7 per cent, indicating that SMEs remained comparatively resilient despite softer broader economic conditions.
Meanwhile, West Midlands SMEs increased savings buffers (+0.9 per cent) and reduced borrowing (-12.4 per cent), broadly mirroring a cautious national picture
At the same time, larger corporates in Barclays Corporate Bank continued to increase longer-term borrowing (+11.1 per cent), notably above the national average of 6.9 per cent, suggesting investment intentions may remain intact
Barclays Business Prosperity research suggests that, despite these pressures, firms are continuing to prioritise investment that supports resilience and long-term growth with around 35 per cent of businesses planning to invest in increasing training and development of existing staff.
While confidence in own businesses prospects remains high, sentiment towards the broader economy is more cautious. Around 69 per cent of firms say they are confident in the UK economy, highlighting a gap between business-level resilience and the wider economic outlook.
Paul Faulkner, Barclays vice chairman in the Midlands, said: “Businesses throughout the West Midlands are navigating a challenging landscape, with economic unpredictability, labour skill gaps and rising costs impacting expansion.
“Yet they are demonstrating remarkable resilience with a large number of firms focused on managing costs and prioritising investment in areas that support long-term efficiency.”
To support businesses to invest in resilience and growth, the Barclays Business Prosperity Fund is available for new and existing Business Banking customers and UK Corporate Banking clients across the UK to apply for lending and refinancing on existing projects.
