West Midlands bucks national negative trend - Lloyds Bank
Business confidence in the West Midlands rose two points during July to 38 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies in the region reported higher confidence in their own business prospects month-on-month, up 12 points at 51 per cent. When taken alongside their optimism in the economy, down seven points to 25 per cent, this gives a headline confidence reading of 38 per cent.
West Midlands businesses identified their top target areas for growth in the next six months as introducing new technology (38 per cent), evolving their offer (38 per cent) and diversifying into new markets (32 per cent).
Read more: West Midlands business confidence resilient - Lloyds Bank
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 26 per cent of businesses in the region expect to increase staff levels over the next year, down ten points on last month.
Overall, UK business confidence dipped by six points to 31 per cent in July, with nine out of 11 regions and nations reporting a lower confidence reading month-on-month.
Optimism in the economy has also fallen, dropping 11 points to 21 per cent, the lowest levels since February this year.
However, firms remained resilient in their own trading prospects, with 43 per cent of companies expecting business activity to increase over the next 12 months, up one point on last month and reaching a 14-month high.
Despite the fall in overall confidence, levels remain higher than the survey’s long-term average reading of 28 per cent and every UK region and nation reported a positive confidence reading in July.
The North East reported the highest levels of business confidence at 43 per cent (down four points on last month), followed by Yorkshire (down seven points month-on-month) and the West Midlands (up two points month-on-month) both at 38 per cent.
Retail was the only broad sector registering higher confidence (up six points to 35 per cent), mostly reflecting stronger transport services.
The fall in overall business confidence this month was led by the service sector sentiment falling by seven points to 30 per cent. While the fall in confidence was seen broadly across this sector, hospitality firms appeared to be more resilient.
Confidence also was lower in manufacturing (down 16 points to 34 per cent) and construction (down eight points to 31 per cent).
Dave Atkinson, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “The West Midlands has bucked the national trend to mark a rise in business confidence in July with many firms anticipating business growth in the year ahead.
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“Firms are particularly focused on driving growth by investing in new technologies, such as automation, AI and robotics.
"These types of technologies can enable firms, particularly those in the manufacturing sector, to increase efficiency and output, helping protect the bottom line and boost long-term prospects.
"We will be by the side of customers to provide the financial tools they need to invest as they explore their growth ambitions.”
