Business confidence rises again
Business confidence in the West Midlands rose for a second consecutive month, up four points during October to 50%.
According to the latest Business Barometer from Lloyds Bank Commercial Banking, the region’s companies reported higher confidence in their own business prospects month-on-month, up one point at 43%.
When taken alongside their optimism in the economy, up four points to 55%, this gives a headline confidence reading of 50%.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.
A net balance of 44% of businesses in the region expect to increase staff levels over the next year, up 12 points on last month.
Overall UK business confidence remained steady month-on-month dipping by just three points to 43% and remaining comfortably above the year-to-date average of 26%. Hiring intentions were unchanged on September’s reading at 37%, while firms’ optimism in the economy (down four points to 44%) and confidence in their business prospects (down one point to 42%) were down marginally.
All UK nations and regions reported positive confidence readings for the seventh consecutive month. Firms in London (up three points to 65%), the North East (unchanged at 61%) and the East Midlands (up eight points to 55%) had the highest confidence readings, while businesses in the South East (down 11 points to 21%) and Wales (down 23 points to 23%) had the lowest overall confidence levels.
Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “The West Midlands economy continues to show its resilience, with businesses demonstrating confidence in their prospects and plans to hire despite the many challenges currently on the horizon. The hope is that they use this confidence as a springboard for growth in 2022.
“Whatever challenges comes their way, we’ll continue to support West Midlands businesses to fulfil their ambitions.”
From a sector perspective confidence remained strongest in manufacturing, rising to a five-month high of 51% (up two points from 49%) with trading prospects being particularly positive (60% expecting stronger activity in the year ahead). Additionally, 68% of manufacturing firms are planning on bringing all furloughed staff back which is more than any other sector. However, these firms are also less likely to say it is easier to find people with the right skills and experience.
Business confidence in retail and services fell slightly to 37% (down five points from 42%) and 43% (down four points from 47%) respectively, although they remain higher than three months ago. 59% of firms in both retail and services expect all their furloughed staff to return, less than in manufacturing. Additionally, higher proportions of firms said that it is becoming easier to hire people with appropriate skills and experience proportions (46% in retail and 53% in services, compared with 41% in manufacturing).
