Slide in business confidence hits hiring intentions
Business confidence in the West Midlands slid six points during July to 19% but the region remained the third most confident in the UK.
According to the latest Business Barometer from Lloyds Bank Commercial Banking, companies in the region reported lower confidence in their business prospects, which fell 17 points to 19%, but their economic optimism rose six points to 19%. Together, this gives an overall confidence of 19%.
Businesses’ hiring intentions reflected the fall in confidence, with a net balance of 13%of businesses in the region expecting to hire more staff during the next year, down 20 points on last month.
Overall confidence across the UK stood steady at 13% as firms’ confidence in their own prospects slipped three points to 19 per cent, while their economic optimism remained at five per cent.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Although business confidence has slipped this month, the West Midlands remains the third most confident region in the UK and businesses here continue to demonstrate the ambition and determination that they’re known for.
“Firms are a little more cautious in their hiring intentions, which is understandable as confidence in their own prospects slides, but generally they feel ready to embrace the opportunities that might come their way to prosper over the year ahead.
“Whatever the coming months may hold, we’ll continue to be by their side and have pledged £1.2billion to support them throughout 2019.”
Across the region, a net balance of six per cent of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, down two points on a month ago.
Ahead of the West Midlands in the confidence rankings was the South West, where businesses were the most confident nationally (29%) and the East Midlands (26%).
Those in Scotland were the least confident, with an overall confidence of zero per cent, 13 points below the national average.
Manufacturing was the most upbeat sector, with overall confidence rising nine points to 19% and overtaking retail, which fell five points to 17%. Overall confidence among services businesses was unchanged at 12%, but construction dropped 11 points to six, the sector’s lowest reading in more than 18 months.
Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “It is promising to see national confidence levels continuing to beat the dip seen in February despite business confidence remaining below the long-term average and overall business confidence remaining unchanged this month.
“Coupled with this, employment expectations still remain largely unchanged from last month, with only one-third of firms planning to increase their staff levels, compared with more than 40 per cent of firms last year, suggesting cautious business behaviour in the current economic environment.”
