West Midlands businesses remain confident in October

Business confidence in the West Midlands fell two points during October to 34 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking. 

Companies in the region reported lower confidence in their own business prospects month-on-month, down six points at 35 per cent. When taken alongside their optimism in the economy, up three points to 33 per cent, this gives a headline confidence reading of 34 per cent.  

West Midlands businesses identified their top target areas for growth in the next six months as entering new markets (49 per cent), investing in their team (40 per cent) and evolving their offer (31 per cent)

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. 
 
Despite a steady confidence reading, a net balance of 28 per cent of businesses in the region expect to increase staff levels over the next year, down ten points on last month. 

Overall UK business confidence rose three points in October from 36 per cent to 39 per cent, and firms’ outlook on the overall UK economy increased four points to 34 per cent. Businesses’ confidence in their own trading prospects also continued the upward trend, rising four points to 45 per cent.

Companies’ hiring intentions reached their highest level since May last year, with 32 per cent of firms intending to increase staff levels over the next 12 months, up six points month-on-month.

Firms in Yorkshire reported the highest levels of business confidence, jumping 12 points to 52 per cent - the highest reading for the region since March 2022. Companies in the South West reported the biggest uptick in business confidence, increasing 26 points month-on-month to 47 per cent.

Following a fall in confidence in September, the retail and service industries both saw an increase in business confidence, with retail business confidence increasing by five points to 37 per cent and services rising seven points to 43 per cent.

Levels are still lower than seen in August, however, when retail business confidence was at 44 per cent and services at 42 per cent. Manufacturing confidence was 36 per cent, unchanged from last month when confidence rose to a three-month high. Construction fell for a second month in a row to 31 per cent (down five points).

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Although there was a downward movement in confidence for businesses in the West Midlands, the fall was only modest – a relatively heartening picture as high interest rates and the cost-of-living crisis continue to persist. In particular, I’m glad to see that the region’s businesses are feeling more optimistic about the UK economy as a whole as we head into the busiest time of the year for many firms.