Confidence in West Midlands amongst highest in the UK

Victoria Square, Birmingham.

Confidence in West Midlands amongst highest in the UK

The Lloyds Bank Business Barometer for January 2018 shows that confidence for firms in West Midlands is at 45%, 10 points above the national average.

Economic optimism in the region stands at 44%, above that recorded across the UK as a whole, while firms’ confidence in their own business prospects is 45%, compared with a UK average of 39%.

Together, this gives an overall confidence of 45%, which is ten points above the average across the UK of 35%.

Nationally, overall confidence rose seven points to a nine-month high, driven mainly by a rise in firms’ economic optimism.

The Business Barometer provides early signals about UK economic trends and has been run monthly since January 2002.

This is the first time that the survey, which questioned 1,200 businesses, has been carried out on a regional as well as national basis.

Glen Wilson regional director for the West Midlands at Lloyds Bank Commercial Banking, said: “Local businesses started 2018 positively, with confidence in a number of areas well above the national average.

“It’s encouraging to see strong job prospects for the region, with many businesses planning to increase their workforce over the next year.”

West Midlands companies’ hiring intentions show that a net balance of 42% of businesses in the region expect to hire more staff during the next year, while firms expect a median annual increase in average pay in the region of one to two per cent during 2018.

Across the region, a net balance of 12% of businesses feel that the UK’s exit from the European Union is having a positive impact on their expectations for business activity.

Overall confidence is highest among businesses in London and the North West, both at 47%, followed by the West Midlands at ten points above the national average.

Businesses in Wales are the least confident, with overall confidence 21 points below the national average at 14%.

Phillip Wood, Midlands regional head at UBS Wealth Management, said: “It’s great to see the sense of optimism among businesses in the region.

“This reflects the conversations we’re having with clients, who are generally feeling optimistic about the year ahead.

“We may see some paring back of investment and hiring in the Midlands as firms continue to adjust their operations in anticipation of the UK's eventual departure from the EU.

“However, a cliff-edge moment for the economy does seem to have faded following the progress made in recent months. We believe UK economic growth will continue at a reasonable pace this year.

“High on the list of priorities for businesses in the West Midlands is improving the lacklustre productivity that has beset the UK economy for many years.

“We hope that Brexit will act as a catalyst to bring about tangible change, with the need to rebalance the UK economy increasingly on the Government’s agenda.”