Region’s business confidence falls but remains in positive territory
Business confidence in the West Midlands fell 10 points during December to 9%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported lower confidence in their own business prospects month-on-month, down 26 points at 12%. When taken alongside their optimism in the economy, up eight points to 7%, this gives a headline confidence reading of 9%.
West Midlands businesses identified their top target areas for growth in the next six months as evolving their offering (34%), diversifying into new markets (27%), and investing in sustainability (26%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of one in 10 West Midlands businesses (13%) expect to increase staff levels over the next year, up 10 points on last month.
Overall UK business confidence rose seven points during December to 17%. The proportion of businesses that felt positive about the wider economy was up 10 points month-on-month to 8%, while their outlook on their own future trading prospects increased by two points to 27%. Businesses also remained optimistic about job creation, with 16% of firms planning to hire more staff in the next 12 months – up two points on November.
All UK regions and nations reported a positive confidence reading in December, for the first time since July, with eight out of 11 recording a month-on-month increase in confidence. Of those, the North West (up 31 points to 40%), North East (up 24 points to 34%) and South East (up 23 points to 14%) saw the largest monthly increases, with the North West now the most optimistic overall.
Dave Atkinson, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It’s clear that businesses have been impacted by a myriad of challenges this year, so it’s pleasing to see confidence among West Midlands firms remain in positive territory as we approach 2023.
“Economic headwinds, however, will of course persist, and we’ll remain by the side of West Midlands firms to make sure they’re equipped with the right financial tools and guidance to continue to push for growth.”
The manufacturing sector reversed a six-month trend of falling confidence, with a nine-point rise to 13%. Confidence in construction and services also increased by nine points to 29% and 18% respectively. However, retail confidence fell slightly, by two points to 13%.
