West Midlands bucks national trend to post rise in business confidence in November – report

Business confidence in the West Midlands rose 15 points during November to 51 per cent, according to the latest Business Barometer from Lloyds. 

Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up 11 points at 63 per cent.

When taken alongside their optimism in the economy, up 19 points to 39 per cent, this gives a headline confidence reading of 51 per cent (vs. 36 per cent in October) – bucking a three-point fall in confidence at a UK national level, and the second-strongest confidence reading of any UK region or nation in November after London (57 per cent). 

A net balance of 50 per cent of businesses in the region also expect to increase staff levels over the next year, up 13 points on last month.  

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as investing in their team, for example through training (52 per cent), entering new markets (41 per cent) and evolving their offering, for instance by introducing new products or services (34 per cent). 

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.  

Overall UK business confidence dipped slightly in November to 41 per cent – down three points from October’s 44 per cent – but remained above the long-term average of 29 per cent. 

While firms’ confidence in their own trading prospects strengthened two points to a net balance of 55 per cent, their confidence in the economy fell nine points to 26 per cent.  

Firms in the manufacturing sector reported the first rise in trading prospects in four months, with the net balance up three points to 49 per cent.

Companies in construction and services also indicated stronger business growth outlooks with net balances of 56 per cent (up six points) and 61 per cent (up four points), respectively.

Retail firms, however, signalled softer prospects for a second month running, with the trading prospects’ net balance down six points at 45 per cent. 

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds, said: “It’s great to see West Midlands business confidence rise this month, sitting comfortably above the UK average and coming in as the second-highest reading the country.  

“Our region’s businesses will be looking to build on this outlook with fresh growth plans, and we’ll be by their side to support their ambitions – whether that’s expanding their teams or launching new products and services.” 

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “In November, the overall confidence metric fell by three points for the third month running. This is the lowest level since June, but still above the survey’s long-term average, which is ultimately positive from a longer-term perspective.  

“These results suggest that while firms have mixed views about the economy, they see their businesses in a good place to cope with any challenges they might face. Hiring intentions, although moderating this month, haven’t fallen by much which is also positive news.  

“Overall, these results show that businesses are still positive and feeling resilient, albeit with tempered views on the economic outlook”.