West Midlands companies show concerns for the future

Lloyds Bank’s Business Barometer, which surveys 1,200 businesses every month, shows that West Midlands’ businesses are now significantly less confident about the future than they were only one month ago.  By the Llloyds Bank measurement, confidence amongst West Midlands’ companies about their business prospects has fallen by 35 points since May. This is in line with a national trend, which, according to Lloyds, shows a fall in confidence in immediate prospects across UK companies

Glen Wilson, Lloyds Commercial Banking regional director for the West Midlands, said: ” This month’s business barometer shows a very different picture to May. Companies reported a jump in confidence last month, while these figures show a correction amid continued economic uncertainty and the prospect of a rise in interest rates later this summer.”

The outlook for recruitment is also down by 26 points since last month, with only 20 of companies in the region saying they intend to hire more staff in the next 12 months.

Wilson added: ” Clearly it is disappointing to see this reflected in hiring intentions, but the West Midlands is home to a wealth of resilient manufacturing businesses with the skills and support needed to prosper, despite the challenges ahead.”

At the same time, 37% of companies in the West Midlands think that interest rates are going to rise sometime this year, with negative consequences for their business. A rate rise of only 1.5% is seen by these companies as something that will further inhibit their prospects in the immediate future.

Overall there is nothing to worry about according to Hann-Ju Ho, LLoyds Commercial Bank’s senior economist, who said: ” Increasing trade tensions and Brexit uncertainties are likely to have weighed on confidence , but it is still near the long term average and so there is no need to hit the panic buttons.”