Lloyds Bank’s Business Barometer for October 2019 shows:
• Overall confidence for firms in West Midlands rose nine points in the past month to 16%
• Economic optimism in the region stood at 10%, 23 points above last month
• Firms’ confidence in their own business prospects was 24%, compared with 28% in September
• Net balance of 15% of local businesses expect to hire more staff
Business confidence in the West Midlands rose nine points during October to 16%, according to the latest Business Barometer from Lloyds Bank Commercial Banking.

Although companies in the West Midlands report slightly lower confidence in their business prospects at 24%, their higher economic optimism at 10% together gives an overall confidence of 16%.

Businesses’ hiring intentions showed that a net balance of 15% of businesses in the region expect to hire more staff during the next year, up three points on last month.

Across the UK, overall confidence rose four points to 6% as firms’ confidence in their own prospects climbed two points to 15%.

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 the government announced its new deal on the UK’s departure from the EU.

Amanda Dorel, regional director for West Midlands at Lloyds Bank Commercial Banking, said: “Despite the ongoing uncertainty that businesses are facing, it’s really encouraging to see business confidence in the West Midlands coming top of regions across the country, demonstrating their ambitions for future growth.

“Although confidence in their own business prospects has dipped slightly this month, their hiring intentions have increased, signifying their appetite to prepare and capitalise on upcoming opportunities in the region to allow themselves to develop and prosper.

“No matter what’s around the corner for Midlands businesses, we’ll continue to be by their side, and have pledged £1.2 billion to support them throughout 2019.”

Across the region, a net balance of 5% of businesses said they felt that the UK’s exit from the European Union was having a negative impact on their expectations for business activity, up 21 points on a month ago.

Regional picture

Businesses in the West Midlands showed the most confidence, at 16%, ahead of the South West at 15%, and East Midlands (13%).
Those in Scotland were the least confident, with an overall confidence of -3%, nine points below the national average.

Sectors
Meanwhile, overall business confidence improved in all four broad sectors, with the largest increases being in the construction sector, which rose eight points to 18% and the manufacturing sector, which increased seven points to 5%. Despite confidence in the services sector rising for the first time since June, by three points to 0%, overall confidence remained the weakest in this sector, while confidence in the retail sector saw a small increase of one point to 15%.

Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said: “Both business confidence and optimism about the wider economy have picked up this month, with economic optimism reaching a three-month high as concerns about the impact of the UK leaving the EU eased. However, there was a slight step down in hiring intentions, which could reflect concerns about ongoing economic uncertainty.”

ENDS
Notes to editors
The Business Barometer’s measure of overall business confidence is the average of responses about how businesses regard the economic outlook and their own trading prospects.

• The overall ‘balance’ of opinion weighs up the percentage of firms that are positive in outlook against those that are negative. Responses are weighted to reflect the composition of the economy.

• The industrial sector in this report represents mainly manufacturing and construction; the consumer services sector comprises distribution and transport & communications; business & other services consists of financial & business services and the public sector.

• The Business Barometer results provide early signals about UK economic trends. The survey started in January 2002 and research is carried out monthly on behalf of Lloyds Bank by BVA BDRC.

• This survey was conducted with 1,200 companies – including 109 businesses in the West Midlands – between 1st and 16th October 2019.

About Lloyds Bank
• Lloyds Bank Commercial Banking provides comprehensive expert financial services for small businesses, mid-sized businesses and multinational corporations.

• Maintaining a network of relationship teams across the UK, as well as internationally, Lloyds Bank Commercial Banking delivers the mix of local understanding and global expertise necessary to provide long-term support to its clients.

• Lloyds Bank Commercial Banking offers a broad range of finance beyond term lending and this spans import and export trade finance, structured and asset finance, securitisation facilities and capital market funding. Its product specialists provide bespoke financial services and solutions, including tailored cash management, international trade, treasury and risk management services.