West Midlands business confidence rises for second month - report

Business confidence in the West Midlands rose for a second consecutive month, up four points?during?October to?50 per cent, according to the latest Business Barometer from?Lloyds Bank?Commercial Banking.?

The Barometer found companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up one point at 43 per cent. When taken alongside their optimism in the economy, up four points to 55 per cent, this gives a headline confidence reading of 50 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 44 per cent of businesses in the region expect to increase staff levels over the next year, up 12 points on last month.

Overall UK business confidence remained steady month-on-month dipping by just three points to 43 per cent and remaining comfortably above the year-to-date average of 26 per cent.

Hiring intentions were unchanged on September 's reading at 37 per cent, while firms ' optimism in the economy (down four points to 44 per cent) and confidence in their business prospects (down one point to 42 per cent) were down marginally.

Amanda Dorel (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “The West Midlands economy continues to show its resilience, with businesses demonstrating confidence in their prospects and plans to hire despite the many challenges currently on the horizon. The hope is that they use this confidence as a springboard for growth in 2022.

“Whatever challenges comes their way, we 'll continue to support West Midlands businesses to fulfil their ambitions. ”

From a sector perspective confidence remained strongest in manufacturing, rising to a five-month high of 51 per cent (up two points from 49 per cent) with trading prospects being particularly positive (60 per cent expecting stronger activity in the year ahead).

Additionally, 68 per cent of manufacturing firms are planning on bringing all furloughed staff back which is more than any other sector. However, these firms are also less likely to say it is easier to find people with the right skills and experience.

Business confidence in retail and services fell slightly to 37 per cent (down five points from 42 per cent) and 43 per cent (down four points from 47 per cent) respectively, although they remain higher than three months ago. 59 per cent of firms in both retail and services expect all their furloughed staff to return, less than in manufacturing.

Additionally, higher proportions of firms said that it is becoming easier to hire people with appropriate skills and experience proportions (46 per cent in retail and 53 per cent in services, compared with 41 per cent in manufacturing).

Hann-Ju Ho, senior economist Lloyds Bank Commercial Banking, said: “While economic optimism saw a slight dent in October due to rising costs and the on-going supply chain issues, it is clear that firms are still feeling relatively buoyant as overall business confidence remains high and above the long-term average.

“With sixty percent of firms saying that they expect to bring all their furloughed staff back to work, and a further thirty percent intending to bring back more than half, it should bode well for the labour market as we head into the winter. ”