Business confidences wanes in the West Midlands on fears of weaker demand
BUSINESS confidence in the West Midlands has fallen with economic uncertainty and weaker UK demand being seen as the biggest threats to businesses’ fortunes.
These are the findings of the latest Business in Britain report, commissioned by Lloyds Bank.
The report, now in its 24th year, gathers the views of more than 1,500 UK companies, predominantly SMEs, and tracks the overall balance of opinion on a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.
The report’s confidence index – an average of respondents’ expected sales, orders and profits over the next six months – has declined by 26 points to 13% in the West Midlands since the previous survey in January 2016.
The most commonly identified threat by companies in the West Midlands over the next six months is economic uncertainty, which was cited by 29% of firms. This was followed by weaker UK demand, which was mentioned by 14% of firms.
This compares with the last Business in Britain survey – completed pre-Brexit – in which weaker UK demand was identified by almost a third (31%) as the biggest threat, followed by access to skills (17%).
The net balance of firms in the region expecting an increase in total exports across the globe fell by 23 points to 19%, reflected by relatively large decreases in firms’ intentions to export to Europe, the Middle East and Asia Pacific compared with January’s report.
More encouraging is the fact that all indicators remained positive, with an increase in firms planning to export to Africa.
Exporters’ desire to continue selling to the US and Canada rose by 1%, boosted by a larger fall in the value of sterling against the dollar than when compared with the Euro.
Mark Cadwallader, regional director for West Midlands SME Banking at Lloyds Bank, said: “We’ve seen a dip in confidence here in the West Midlands, which reflects the fact that the EU referendum vote has caused some uncertainty across the region.
“Despite the fall in sentiment, exporters continue to expect overseas sales to grow, particularly across North America and Africa.”
