Region’s business confidence remains ahead of UK average despite fall

Business confidence in the West Midlands fell 23 points to 30% in Junebut remains above the UK average.

According to the latest Business Barometer from Lloyds Bank Commercial Banking, companies in the West Midlands reported significantly lower confidence in their own business prospects month-on-month, down 37 points at 24%.

When taken alongside their optimism in the economy, down seven points to 36%, this gives a headline confidence reading of 30%.

West Midlands businesses flagged a range of growth opportunities for the next six months, including investing in the growth and development of their team (54%), exploring new markets (36%), and evolving their offer with a new product or service (33%).

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

Despite the fall in confidence a net balance of 34% of businesses in the region expect to increase staffing levels over the next year, up three points on last month.

Across the UK, business confidence fell 10 points during June to 28%. Firms’ optimism in the economy dropped 12 points to 21%, while their outlook on their future trading prospects was down eight points, at 34%. The net balance of businesses planning to create new jobs also decreased, by nine points, to 28%.

Every UK region and nation reported positive confidence readings in June. However, all except the East of England (up 17 points to 31%) recorded a lower reading than last month. London (down 28 points to 35%) reported the largest decrease month-on-month, followed by the West Midlands (down 23 points to 30%) and Scotland (down 15 points to 27%), with the North West (down two points to 42%) now the most optimistic region overall.

Dave Atkinson, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “The fall in confidence here in the West Midlands reflects the trend we’re seeing across the country as the impact of the cost-of-living crisis and wider global economic headwinds continue to effect local firms.

“It’s important that businesses keep a close eye on cashflow and have the headroom needed to react quickly to market changes if they’re to remain resilient and profitable. We’ll be working with local firms to help them navigate this challenging period and support them as they explore new growth opportunities.”