West Midlands business confidence rises

Business confidence in the West Midlands rose seven points during August to 63 per cent, according to the latest Business Barometer from Lloyds. 

Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up 12 points at 69 per cent.

When taken alongside their optimism in the economy, up three points to 57 per cent, this gives a headline confidence reading of 63 per cent (vs. 56 per cent in July). 

A net balance of 68 per cent of businesses in the region also expect to increase staff levels over the next year, up 21 points on last month. 

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 (52 per cent), introducing new technology, such as AI or automation (43 per cent) and evolving their offer, for example by introducing new products or services (39 per cent). 

Overall, UK business confidence rose two points in August to 54 per cent.  

While firms’ confidence in the wider economy dropped three points to 44 per cent, their optimism in their own trading prospects rose five points to 63 per cent. 

London was the most confident part of the UK in August (69 per cent), followed by the East of England (64 per cent). 

Manufacturing firms saw confidence up 14 points this month, to 62 per cent.

This level was previously seen in 2015. Retailers also saw an increase in confidence this month, with levels up 13 points to 57 per cent, a five-month high.

However, construction firms’ confidence fell by five points to 40 per cent, a four-month low while confidence in service sector firms also fell eight points to 53 per cent.   

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds, said: "West Midlands confidence has continued to rise and to sit above the UK average.  

"The focus on steps such as investing in teams and embracing new technology reflects local businesses’ focus on driving further growth. We'll continue to provide our on-the-ground support as firms press ahead with their strategies." 

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “This continued upward trend in business confidence suggests UK firms remain optimistic about their own trading prospects while there is a modest cooling of confidence in the wider UK economy.

“Firms are focusing on what they can control, with many looking to pursue growth opportunities, including entering new markets and adopting new technologies. 

“Wage expectations have seen a notable shift this month, but it remains to be seen whether this signals the start of a sustained trend or a temporary uplift, as they have been broadly stable in recent months.”