West Midlands firms report ‘lower confidence’ in trading outlook

Business confidence in the West Midlands fell 24 points during June to 38 per cent, according to the latest Business Barometer from Lloyds.

Companies in the West Midlands reported lower confidence in their own trading outlook month-on-month, down 14 points at 53 per cent.

When taken alongside their optimism in the economy, down 33 points to 23 per cent, this gives a headline confidence reading of 38 per cent – dropping from 62 per cent in May.

Despite this, West Midlands firms reported strong customer demand (67 per cent) as a driver of confidence in their own trading outlook.  

A net balance of 25 per cent of businesses in the region expect to increase staff levels over the next year, down 24 points on last month.  

Business confidence in the West Midlands now sits below the 12-month average of 54 per cent, with its highest figure of 66 per cent in March 2026. 

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as evolving their offering through new products or services (48 per cent), investing in their team through training and development (43 per cent) and entering new markets (40 per cent).

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds, said: “The region’s businesses are at a turning point.

Confidence has declined sharply, but it’s positive to see that companies are redirecting their investment, rather than scaling back altogether.

“Their focus on product development, team training and new market entry shows pragmatism over pessimism.

West Midlands firms have the ambition to recover but need support to achieve this. We’re continuing to work with our customers to provide them with the tools and resources to thrive amid the current conditions.”

Overall, UK business confidence fell three points in June to 44 per cent.

Firms’ trading outlook fell two points to 56 per cent and their optimism in the economy generally also fell four points to 31 per cent.

The 12-month average for overall confidence is currently sitting at 47 per cent and is trending above the long-term average of 30 per cent since the survey began in 2002.

Despite a modest softening in business confidence due to wider global uncertainty, two thirds of firms nationally (64 per cent) expect stronger output over the year ahead and hiring intentions for the coming twelve months strengthened for the first time since March.

The share of firms planning to increase their workforce rose to 55 per cent, while 14 per cent anticipated headcount reductions, leaving the net balance up five points at 41 per cent.

Firms intending to hire cited the need to meet strengthening demand and expand capacity, pointing to a degree of confidence in near-term activity.

Business confidence rose across six of the twelve UK regions and nations in June, with the Southwest seeing a 22pp jump to 44 per cent, and the East Midlands becoming the most confident region.