West Midlands business confidence rises in July - report

Business confidence in the West Midlands rose 15 points during July to 52 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up 10 points at 46 per cent. When taken alongside their optimism in the economy, up 18 points to 57 per cent, this gives a headline confidence reading of 52 per cent (vs. 37 per cent in June).

A net balance of 34 per cent of businesses in the region also expect to increase staff levels over the next year, up eight 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 teams, for example through training (52 per cent), introducing new technology (40 per cent), and evolving their offering, for example by introducing new products or services (39 per cent).

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

Overall UK business confidence climbed nine points in July to a net balance of 50 per cent – the same as in May when confidence reached an eight-year high.

Businesses’ confidence in their own trading prospects rose 12 points to 56 per cent – the highest reading since April 2017. Meanwhile, confidence in the economy climbed six points to 45 per cent.

Wales and the East Midlands (both 62 per cent) were the joint-most confident UK regions or nations in July, followed by the East of England (61 per cent).

There was an improvement across all sector categories this month – most notably in retail which rose by 25 points to a post-pandemic high of 60 per cent.

There were also significant gains in manufacturing trading prospects, with the net balance increasing by nine points to a two-year high. Services rose 10 points to 56 per cent, while construction saw a more modest increase by two points to 44 per cent.

Dave Atkinson (pictured), regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “This month’s significant uptick in business confidence is a testament to the region's resilience.

“The recent announcement that Birmingham will host the Invictus Games in 2027 is another exciting development that adds to the region's positive momentum.

“The games will put the West Midlands in the international spotlight once again and provide a significant boost to the local economy through increased tourism and investment.

“We’ll continue to be by the side of local firms with our funding and support – whatever opportunities lie ahead.”

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “This month shows that businesses are feeling more confident, buoyed by their positive trading prospects and economic outlook. Retail-focused businesses were the main driving force behind the positive rise in trading prospects and these results tally with the improvement we have seen in consumer confidence.

“With the data suggesting that businesses may have taken a more cautious approach in June, next month will be one to watch to see if the renewed sense of optimism continues.”