West Midlands business confidence upbeat as firms plan hiring spree 

Business confidence in the West Midlands fell six points during September to 36 per cent, in line with the year-to-date average of 36 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 two points at 41 per cent. When taken alongside their optimism in the economy, down 12 points to 30, this gives a headline confidence reading of 36 per cent.   

West Midlands businesses identified their top target areas for growth in the next six months as entering new markets 42 per cent, investing in their teams 38 per cent and introducing new technology 29 per cent.  
  
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.  
  
A net balance of 38 per cent of businesses in the region expect to increase staff levels over the next year, up 26 points on last month.  

Overall UK business confidence fell five points in September from 41 per cent to 36 per cent. Firms’ outlook on their own trading prospects remained strong at 41 per cent despite a five-point drop on last month, and their optimism in the UK economy also remained robust at 30 per cent, down by seven points on August’s reading. 

Businesses hiring intentions remained upbeat with 26 per cent of firms reporting plans to increase their staff levels over the next year, down five points on last month.  

The fall in business confidence this month centred around the retail and services sectors, following strong sentiment in August. Retail confidence fell to 32 per cent (down 12 points) dragged down in particular by trading prospects, while services confidence declined to 36 per cent (down eight points).

Construction confidence also fell to 36 per cent (down eight points). However, manufacturing was stronger, with confidence rising to a three month high of 36 per cent (up six points). 

Dave Atkinson (pictured) regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It's fantastic to see that business confidence in the region remains firmly in positive territory as we head into the colder months.     

 “Firms in the West Midlands are committed to their teams and it’s encouraging to see that so many companies are intending to increase their staff levels in the coming months. Businesses seeking expansion should review their working capital, to ensure they have the funds they need to make the most of opportunities as they arise.    

“As always, we’ll remain by the side of West Midlands businesses and support them with their growth ambitions.” 

Hann-Ju Ho, senior economist Lloyds Bank Commercial Banking, said: “While the gains in business confidence we saw in August have not been maintained, it’s important to see the wider trend clearly reflected in the data which paints a very different picture to this time 12 months ago, when the economy was in significant difficulties.  

“Despite some month-to-month movements, if you look at the year in quarterly time periods, confidence has steadily risen from 20 per cent in the first quarter, 26 per cent in the second and now an average of 27 per cent in the third.  

“Although the economic environment remains uncertain with inflation and interest rate pressures playing their part, the recent decision by the Bank of England to leave interest rates unchanged is likely to help businesses feel more upbeat about the future, which may underpin confidence in the last three months of the year.”