Region’s business confidence continues to rise and remains highest in the UK

Business confidence in the West Midlands rose eight points during November to 24% and remains the highest in the UK.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, companies in the West Midlands report lower confidence in their business prospects at 20% but higher economic optimism at 29%.

When taken alongside their views of the economy, this gives an overall confidence of 24%.

Businesses’ hiring intentions showed that a net balance of 22% of businesses in the region expect to recruit additional staff during the next year, up seven points on last month.

Across the UK, overall confidence rose three points to 9% as firms’ optimism about the economy rose 10 points to 7%, although their confidence in their own prospects dropped three points to 12%.

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 West Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see that business confidence in the West Midlands is on the rise once again and remains the highest in the UK, demonstrating local firms’ ambitions for growth.

“The fact that they are also planning to grow their headcount over the coming 12 months also shows that businesses are preparing themselves for every opportunity to develop and prosper.

“As businesses continue to invest in their growth into the new year and beyond, we will be firmly by their side and pledged to lend £1.2 billion to support Midlands businesses throughout 2019.”

Across the region, a net balance of 1% 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. This compares with a net balance of 5% that thought it was having a negative impact a month ago.

Businesses in the West Midlands once again showed the most confidence, at 24%, ahead of London at 20%, and East Midlands at 14%.

Those in Scotland were the least confident, with an overall confidence of -6%, 15 points below the national average.

Nationally, overall business confidence improved in manufacturing, retail and services and stayed broadly steady in construction. The largest increase was in the retail sector, rising six points to 21%, while the construction sector remained high at 16% despite a slight decline of two points.
Sentiment in the manufacturing sector rose to a four-month high of 10%, while services confidence also increased for a second month, by four points to 4%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “The third consecutive increase in overall business confidence is positive for the UK as economic optimism reaches the highest level since January.
“While concerns about the impact of the UK leaving the EU continued to ease slightly, hiring intentions remain broadly stable and it will be interesting to see how this trend continues towards the end of 2019 and into the start of next year.”