West Midlands business confidence falls in September

Business confidence in the West Midlands fell 24 points during September to 39 per cent, according to the latest Business Barometer from Lloyds. 

Companies in the West Midlands reported lower confidence in their own business prospects month-on-month, down 32 points at 37 per cent.

When taken alongside their optimism in the economy, down 16 points to 41 per cent, this gives a headline confidence reading of 39 per cent (vs. 63 per cent in August). 

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as investing in their team, for example through training (56 per cent), evolving their offering, for example by launching new products or services (51 per cent) and entering new markets (32 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.  

Overall, UK business confidence fell 12 points in September to 42 per cent.  

Firms’ confidence in their own trading prospects fell 12 points to 51 per cent, and their optimism in the wider economy fell 11 points to 33 per cent.  

The North East was the most confident UK nation or region in September, climbing 13 points to 68 per cent, followed by London (57 per cent).  

Firms across manufacturing, construction, retail and services all saw confidence fall this month.

The biggest change was in manufacturing with a decline of 31 points to 31 per cent, a two-year low.

Retail sentiment fell 17 points to 40 per cent, its lowest level in four months.

Similarly, confidence in the service sector fell six points to 47 per cent, the lowest reading since April.

Construction continued to decline for the fourth consecutive month, dropping 5 points to 35 per cent. 

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds, said: “While confidence has fallen, local firms are continuing to explore new areas for growth.

“And it’s particularly encouraging to see them prioritise investing in their people – something that will have benefits that extend across the regional economy.  

“We’ll continue to provide our on-the-ground support as businesses plan and take their next steps.” 

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “While increased market volatility earlier in the month may have impacted confidence, levels of trading prospects and economic optimism remain above their long-term averages.

“Businesses may find reassurance that the Bank of England is expected to reduce interest rates further in the next six months, while long-term global bond yields have calmed which, if sustained, may have a positive impact on businesses as we move into the last few months of the year.”