West Midlands business confidence was the highest in the UK throughout the final quarter of the year, despite falling one point during December to 23%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.
Companies report higher confidence in their business prospects at 25% and lower economic optimism at 21%. Together, this gives an overall confidence of 23%, the highest in the UK for the third month running.
A net balance of 21% of businesses in the region expect to hire more staff during the next year, down one point on last month.
Across the UK, overall confidence edged up one point to 10% as firms’ confidence in their own prospects rose six points to 18%, although their optimism in the economy fell to 2%.
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 carried out before the result of last week’s General Election was known.
Amanda Dorel, regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Although business confidence fell very slightly this month, businesses in the West Midlands remain the most confident in the UK for a third consecutive month and the sixth time this year.
“This demonstrates their ambitions for future growth and readiness to grasp the opportunities that projects such as HS2 will bring to the region.
“As a result, businesses have higher confidence in their business prospects and are showing their ambitions for future growth to develop and prosper.
“As businesses continue to invest in their growth into the new year and beyond, we will be by their side, just as we have been by committing to lend £1.2 billion to support Midlands businesses throughout 2019.”
Across the region, a net balance of 11% of businesses said they felt that the UK’s exit from the European Union was having a positive impact on their expectations for business activity, up 10 points on a month ago.
Behind the West Midlands at 23%, the East Midlands had the second highest confidence at 18%, ahead of London at 16%.
Those in East of England were the least confident, with an overall confidence of -2%, 12 points below the national average.
In December, overall business confidence saw a marked improvement in the manufacturing sector, increasing 17 points to 27%. Confidence in the retail sector increased by one point to 22%, while confidence in the service sector stayed broadly steady at 4%. The construction sector saw a slight decrease of four points to 16%.
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “As we come to the end of what has undoubtedly been a turbulent year, it is encouraging to see sustained increases in overall business confidence and the sharp improvement in manufacturing confidence.
“There is now clarity over the UK’s departure from the EU, but the focus will turn to whether a new trade agreement can be negotiated during the transition period which currently runs until the end of next year.”