West Midlands business confidence soars, according to Lloyds report

Lloyds-Bank-Amanda-Dorel

Business confidence in the West Midlands rose eight points during February to 47 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 four points at 42 per cent. When taken alongside their optimism in the economy, up 10 points to 52 per cent, this gives a headline confidence reading of 47 per cent.

The Business Barometer, which questions 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. This month’s survey captured responses between 1st and 15th February before the removal of various Covid restrictions across the UK’s nations.

A net balance of 44 per cent of businesses in the region expect to increase staff levels over the next year, up 24 points on last month.

Overall UK business confidence saw an uptick in February, rising five points from January’s reading of 39 per cent to 44 per cent – its highest level since last September.

Firms remained positive about their future trading prospects, with a four-point increase month-on-month to 45 per cent, while optimism in the economy overall also increased by five points to 43 per cent. The net balance of businesses planning to create new jobs rose by nine points to 38 per cent.

Every UK nation and region maintained a positive overall confidence reading in February. As well as the West Midlands, the North East (up 17 points to 57 per cent) and South West (up nine points to 46 per cent) saw the biggest increases month-on-month, with the North East reporting the highest levels of business confidence overall. Only the North West (which remained unchanged at 44 per cent) and Scotland (down two points to 35 per cent) did not have higher confidence readings than last month.

Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “It’s fantastic to see that the rise in confidence among West Midlands businesses is one of the highest in the UK. In particular, it’s pleasing to see firms’ plans to recruit more staff increase so significantly, which in time will no doubt provide a further boost to the local economy.

“We will continue to work closely with businesses across the region to ensure they are ready to identify and make the most of opportunities for growth.”

The further easing of Covid restrictions in January had a positive impact across the sectors with strong increases in manufacturing (up 11 points to 54 per cent) and construction (up 18 points to 51%) with both reaching their highest level since the start of the pandemic. Retail confidence rose three points to 47 per cent, another high since the start of Covid. Services remained unchanged at 38 per cent.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “It’s extremely encouraging to see such an improvement in business confidence reaching its highest level since September, fuelled by trading prospects reaching their highest level since the start of the pandemic.

“With hiring intentions also reaching their highest level since the end of the furlough scheme there is hope that the easing of supply bottlenecks will alleviate a number of challenges that businesses have been facing and help underpin the UK’s growth in 2022.”