West Midlands business confidence rises - report

Business confidence in the West Midlands rose by one point during July to 30 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the West Midlands reported lower confidence in their own business prospects month-on-month, down five points at 21 per cent.

When taken alongside their optimism in the economy, up eight points to 39 per cent, this gives a headline confidence reading of 30 per cent.

The Business Barometer questions 1,200 businesses monthly and 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, up five points on last month.

Overall UK business confidence dipped three points to 30 per cent in July but remains well above the year-to-date average of 19 per cent.

Businesses in the North East (40 per cent), East Midlands (38 per cent) and North West (38 per cent) were the most optimistic overall.

In July, four regions reported an increase in confidence: alongside the West Midlands, the North East (up 13 points to 40 per cent), North West (up nine points to 38 per cent) and East Midlands (up seven points to 38 per cent) saw confidence rise, while the remainder reported a drop.

Scotland (down 14 points to 28 per cent), East of England (down 11 points to 25 per cent) and Wales (down nine points to 12 per cent) reported the biggest falls in confidence but all retained an overall positive reading.

The overall number of UK firms expecting planning to create new jobs in the next twelve months rose one point to 18 per cent in July, the highest reading since November 2018 and the sixth consecutive month that employment expectations have risen.

Amanda Dorel (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Confidence is gradually rising again here in the West Midlands as businesses look to kick-start their recovery from the effects of the pandemic.

“The Prime Minister spoke of the Government 's commitment to investing in the region during his recent visit to the West Midlands, and any news of investments will have been welcomed by local businesses.

“The West Midlands is a hub of innovation, industry and entrepreneurship, and we hope that further investment in the region will be forthcoming to provide the impetus for local businesses to thrive. ”

Confidence fell slightly in the broad economic sectors in line with the overall economic picture.

Manufacturing and retail confidence declined for a second month from previously elevated levels.

Nevertheless, at 33 per cent (down from 35 per cent) for manufacturing and 32 per cent (down from 36 per cent) for retail, confidence remains at historically strong levels. Construction and services sector confidence also dipped to 33 per cent (from 35 per cent) and 28 per cent (from 31 per cent), respectively.

In the subsectors, confidence was particularly strong in hospitality (63 per cent, up from 38 per cent), and transport (53 per cent, up from 37 per cent), reflecting the further opening of the economy, as well as in business services and finance.

Employment and pay growth expectations were also especially strong in these subsectors as well as in construction.