Business confidence higher in the West Midlands than elsewhere – Lloyds
BUSINESS confidence in the West Midlands – especially in the manufacturing sector – has risen substantially fuelling hopes of continued growth in the first half of 2014, according to a new study.
The latest Business in Britain report from Lloyds Bank Commercial Banking shows that confidence levels in the West Midlands are the highest anywhere in the UK, with manufacturing the most positive sector overall.
It concludes confidence levels are being driven by expectations of stronger profits, orders and sales over the next six months.
The survey’s key Business Confidence Index tracks businesses’ views of expected 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 twice yearly report, now in its 22nd year, canvasses the views of 1,500 UK businesses. The report concludes the confidence index has increased by 18 points to 50%, from 32% in the previous survey in July 2013. Nationally this is the fourth consecutive increase in the net balance of business confidence and is now just short of the survey high of 46% recorded in January 1994.
Leigh Taylor, Regional Director SME banking in the Midlands and North, Lloyds Bank Commercial Banking, said: “This is an encouraging improvement in confidence as we start 2014 and we hope that it will lead to a sustainable UK recovery allowing businesses in the West Midlands and Gloucestershire to grow and prosper.”
Companies across the UK also remain optimistic about prospects for the economy and the overall net balance of firms that are now more confident about the economic outlook is the highest it has been since January 2007.
Nearly three quarters of West Midlands businesses (71%) stated they are currently more optimistic than they were six months ago, while less than a tenth (6%) stated they were less so.
It said prospects for the first half of 2014 continue to look positive with expectations for total sales, orders and profits in the next six months – the three key indicators of business confidence – all increasing. The three indices remain well above their respective long-term averages and point to stronger economic growth in the first half of the year.
Nearly two thirds of businesses (61%) said they expected their orders to increase during the first half of the year; compared to just 4% which think orders will fall. The resulting 57% overall net balance represents a 20 point increase from July 2013.
Over two thirds of businesses (64%) stated they think their sales will increase in the next six months, while one in 20 (5%) expect a drop, leading to a 59% overall balance. This is a 20 point increase from the second half of last year.
The balance of firms anticipating greater scope for increasing prices over the next six months has also increased by three points to 23%. Firms’ hopes of rising prices may help to underpin their expectations of stronger profits over the next six months. The net balance of firms expecting rising profits increased for the third consecutive period, to 33% and came close to the national survey high of 38% seen in 1993.
