Business confidence in the West Midlands is at its highest point for more than three years after rising 19 points during September to 46 per cent, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
While the survey was probably carried out before the fuel mini-crisis, companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up 16 points at 42 per cent. When taken alongside their optimism in the economy, up 23 points to 51 per cent this gives a headline confidence reading of 46 per cent, the highest level since July 2018.
The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide. This month’s survey was conducted before fuel disruption and ongoing supply chain issues tightened their grip.
A net balance of 32 per cent of businesses in the region expect to increase staff levels over the next year, up 30 points on last month.
Overall UK business confidence rose 10 points in September to 46 per cent with all regions and nations reporting double-digit confidence levels. The number of businesses planning on hiring new staff more than doubled from 18 per cent to 37 per cent as firms look to increase headcount over the next 12 months. Overall confidence in trading prospects rose by nine points to 43 per cent and firms’ optimism in the economy increased by the same amount to 48 per cent.
All bar three UK regions reported an increase in confidence with Wales (up 27 points to 46 per cent) and Yorkshire and Humber (up 22 points to 48 per cent) reporting the biggest jumps. Firms in the North West (down 17 points to 47 per cent) and East of England (down nine points to 30 per cent) reported falls in confidence but both remained comfortably in positive territory. Businesses in the South East reported no change month on month at 32 per cent.
Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It’s promising to see confidence return among West Midlands businesses, with the Government’s Covid Winter Plan likely to be a key factor in this by providing further clarity about the future.
“However, firms are still facing significant challenges, not least with the current fuel market disruption and ongoing supply chain issues. We’ll work closely with businesses in the region to help them navigate these obstacles and lean into any opportunities that come their way in the months ahead.”
Confidence increased across the four broad sectors, notably in manufacturing and services. Manufacturing (up nine points to 49 per cent) reached a four-month high, while services gained 11 points to 47%, the highest since early 2017, with particularly strong trading prospects in hospitality and financial & business services. Retail confidence improved by 8 points to a four-month high of 42%, while construction only edged up by 1 point to 41% which was nevertheless a three-year high.
Hann-Ju Ho, Senior Economist Lloyds Bank Commercial Banking, said: “It remains encouraging to see a further improvement in business confidence reaching its highest level since April 2017.
“Employment expectations have risen significantly, with more than half of businesses expecting to recruit in the next 12 months. The hope is that the availability of labour will increase to alleviate current staff shortages for many firms, which will help to underpin UK economic growth over the medium term.”