Region’s business confidence remains near record low

Business confidence in the West Midlands rose two points during May to -23%, although remained among record lows.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, companies’ confidence in their own business prospects remained stable month-on-month at -15%. When taken alongside their views of the economy overall, this gives a headline confidence reading of -23%.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

In an illustration of the impact COVID-19 is having on the region’s business, the majority of firms continued to see demand negatively affected during May, but with some signs of improvement month-on-month.

Though 71% reported experiencing a fall in demand for their products and services, this was down eight points on the month before. However, just 4% experienced an increase in demand, down on 9% in April.

The number of firms in the region operating at less than 50% capacity decreased three points to 41%. Almost a quarter of businesses (24%) weren’t operating at all, a decrease of four points on April.

Of the 76% of businesses reporting disruption to their supply chain during May, 29% expected the situation to improve within three months, while just 5% expected it would take more than 12 months to return to normal levels.

Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It’s encouraging to see that the outlook of West Midlands firms hasn’t fallen further after dropping sharply in April. There are signs that some businesses are beginning to restart operations and that fewer are experiencing a subdued demand than in April.”

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