West Mids business confidence improving

THE latest Business in Britain report from Lloyds TSB Commercial has revealed that the confidence of West Midlands businesses has improved since January 2012.

But it also found that investment is on hold, which could damage the regions competitiveness.

Lloyds TSB’s twice yearly report, which canvasses the views of 146 West Midlands businesses, shows that confidence has edged up, despite continuing tough economic challenges.

The report tracks businesses’ views of likely sales, orders and profits for the coming six months and presents the overall “balance” of opinion weighing up the percentage of firms that are positive in outlook against those that are negative. 

The current overall business confidence balance in the West Midlands is 20 – a 12 point increase on the balance of eight recorded in January. However, while confidence among businesses has improved, the majority of businesses in the region are keeping investment on hold.

John Robson, regional director for Lloyds TSB Commercial in the Midlands and North, said: “It is encouraging, after a tough first half, to see that SMEs are exhibiting a lift in confidence and that they expect to see improved sales and orders over the next six months.

“Businesses have proved resilient in a tough economic climate and this is exactly what is required to see the UK economy grow. If firms continue to take advantage of profitable opportunities that will maximise their growth potential we have reasons to be hopeful for the future.”

Almost half of businesses (46%) state that their investment will stay the same and only a fifth (21%) plan an increase.

But less than a fifth of businesses (16%) believe they will need to cut investment before the end of the year.

When asked what the greatest threat to their business would be over the next six months, almost half (49%) of businesses cited weaker UK demand, compared to 67% when asked in the last survey in January.

Robson said: “Firms continue to see weaker UK demand as the main threat to their businesses, and so it is crucial that they improve their competitiveness on the international stage.

“However, given that UK businesses have not been increasing their investment levels since the drastic cuts at the beginning of the financial crisis, they should be bold and do so now, especially if they want to improve their competitive edge in demanding export markets.”