Midlands firms buck national trend to see rising confidence during November

Business confidence in the West Midlands rose 15 points during November to 51%, , with companies in the West Midlands reporting higher confidence in their own business prospects month-on-month, up 11 points at 63%. 

When taken alongside their optimism in the economy, up 19 points to 39%, this gives a headline confidence reading of 51% (vs. 36% 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%). 

The figures were reported as part of the Lloyds Business Barometer for November, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide.  

“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," said Dave Atkinson, regional director for the West Midlands at Lloyds.

“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.” 

Firms in the manufacturing sector reported the first rise in trading prospects in four months, with the net balance up three points to 49%. Companies in construction and services also indicated stronger business growth outlooks with net balances of 56% (up six points) and 61% (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%.

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

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

A net balance of 50% 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%), entering new markets (41%) and evolving their offering, for instance by introducing new products or services (34%). 

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”.