West Midlands business confidence buoyant in July as economic optimism climbs – report

Business confidence in the West Midlands rose 19 points during July to 57 per cent, according to the latest Business Barometer from Lloyds.

Companies in the West Midlands reported higher confidence in their own trading outlook month-on-month, up 12 points at 65 per cent.

When taken alongside their optimism in the economy, up 26 points to 49 per cent, this gives a headline confidence reading of 57 per cent (vs. 38 per cent in June 2026).

West Midlands firms' confidence in the economy was driven by improving customer demand (78 per cent), increased investment in capacity (43 per cent) and better supply chain conditions (33 per cent). This strong performance reflects growing business activity and a more positive economic outlook.

A net balance of 58 per cent of businesses in the region also expect to increase staff levels over the next year, up 33 points on last month.

Business confidence in the West Midlands now sits above the 12-month average of 55 per cent, with this month seeing its highest figure of 66 per cent in March 2026.

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as evolving their offering, by introducing new products or services (48 per cent), investing in their team through training (43 per cent), and entering new markets (40 per cent).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Dave Atkinson, (pictured) regional director for the West Midlands, said: “We're pleased to see West Midlands business confidence increase in July, as firms become more optimistic about their own trading outlook and the wider economy.

“The strong momentum and market conditions provide a solid base on which to build that confidence, and it's especially encouraging that West Midlands business confidence is outpacing the national average.

“These figures are a positive development, putting businesses in a good position to maximise growth and we'll continue to work with them on their plans for the future.”

Overall, UK business confidence rose five points in July to 49 per cent, hitting a four-month high.

This was driven by an increase in economic optimism, reflecting the decline in global energy prices, the Bank of England holding interest rates and the announcement of an interim peace agreement in the Middle East at the time of the survey. 

Optimism in the wider economy rose 11 points to 42 per cent, compared to a 12-month average of 37 per cent. Of those surveyed, 59 per cent said they were optimistic (up four points from June) in the wider economy, while those who felt pessimistic decreased by seven points to 17 per cent.

The main factors cited by firms who felt more positive this month were, stronger customer demand, improving interest rates or financial conditions and better economic news. 

Businesses’ own trading outlook remained unchanged at 56 per cent in July, compared to a 12-month average of 57 per cent.

Sixty-five percent of firms (up one point from June) expect stronger output over the year ahead, while those expecting weaker activity increased one point to 9 per cent. Among firms expecting stronger activity, the main factors were, stronger customer demand, increase investment in capacity or tech and improved supply chain conditions.