• Business confidence in the West Midlands rose 24 points to 41% in April
• Firms’ optimism in their own trading prospects increased by 27 points to 43%, while optimism in the economy climbed 22 points to 40%
• Overall UK confidence held steady at 42% in April – the same level as in March and February

Business confidence in the West Midlands rose 24 points during April to 41%, the sharpest rise of any UK nation or region, 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 27 points at 43%. When taken alongside their optimism in the economy, up 22 points to 40%, this gives a headline confidence reading of 41% (vs. 17% in March).

Businesses in the West Midlands identified their top target areas for growth in the next six months as investing in their teams, including hiring new staff and investing in training (49%), introducing new technology (49%) and entering new markets (34%).

A net balance of 17% of businesses in the region also expect to increase staff levels over the next year, the same proportion as in March.
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.

National picture

Overall UK business confidence held steady at 42% in April, the same level as recorded in March and February.

While firms’ confidence in their own prospects dipped marginally by four points to 45%, their confidence in the economy rose by four points to 39%. Meanwhile, the net balance of companies planning to increase staff levels over the coming 12 months climbed six points to 33%.

The East of England was the most confident UK nation or region in April (56%), followed by the Wales (51%) and the North East (46%).

Sector Insights

Businesses in the manufacturing sector reported increased confidence this month, recording an increased score of 45% (up 4 points) which is the highest level for 3 months. Similarly, confidence among firms in the services sector (42%) and construction (41%) also improved, largely driven by greater economic optimism.

In retail, confidence pulled back slightly from last month’s strong showing to 40%, illustrating that confidence in this sector remains fragile. Retail is also more liable to be impacted by external factors sectors other sectors do not face into, such as the poor weather.

Dave Atkinson, regional director for the West Midlands and Lloyds Bank Commercial Banking, said:

“After a drop in confidence last month, it’s encouraging to see that the West Midlands has bounced-back to boast the sharpest increase in business confidence in the UK during April.

“Our region has an agile and resilient economy, so it’s unsurprising that almost half of the businesses surveyed are planning to accelerate their growth by investing in their workforce or by introducing new technologies. This resilience was further highlighted earlier this month, when hundreds of likeminded businesses came together at the Birmingham Business Expo, collectively showcasing the drive and innovation that exists in high-growth firms that are fuelling the region’s increased optimism and confidence.”

Hann-Ju Ho, Senior Economist, Lloyds Bank Commercial Banking, said:

“We are beginning to see a consistent trend emerge from our Barometer results in recent months. Businesses are feeling increasingly confident about the economy, coinciding with falling inflation and hopes that interest rates will start to fall this year.

“There continues to be a mixed picture among the regions, with the biggest rises seen in Wales and the South West. The strongest confidence was reported in the East of England, with confidence rising for the third consecutive month. Confidence in the North East eased slightly but remained strong in April.

“The second quarter of 2024 has started brightly for businesses, and we are seeing firms expressing greater confidence in an enduring economic recovery.”