Optimism still running high in march for West Midlands businesses

Business confidence in the West Midlands rose two points during March to 62% according to the latest Business Barometer from Lloyds – the joint-highest level of any UK nation or region.  

Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up five points at 70%. When taken alongside their optimism in the economy, down two points to 53%, this gives a headline confidence reading of 62% (vs. 60% in February) – tied with London (62%) as the joint-highest of any UK nation or region in March.  

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as entering new markets (45%), investing in their team, for example through training (44%) and evolving their offering, for example by introducing new products or services (43%). 

The Business Barometer, which surveys 1,200 businesses monthly and which has been running since 2002, provides early signals about UK economic trends both regionally and nationwide. This data was gathered between the March 3-17, ahead of the Spring Statement.  

Dave Atkinson, regional director for the West Midlands at Lloyds, said: “It’s great to see such a positive outlook from the West Midlands’ businesses, buoyed by strong confidence in their own prospects.  

 “We’ll be ready to support the region’s businesses are they now look to act on this outlook and make investments for future growth – whether that’s entering new markets or investing in their team.” 

Nationally, UK business confidence was 49% in March – the same as in February.  

While firms’ optimism in their own trading prospects held steady at 57%, their confidence in the wider economy dropped one point to 40%.  

The North West (59%) followed the West Midlands and London to report the second-highest confidence reading in March.  

Retail confidence rose seven points to 58%, a post-pandemic high, reflecting positive trading prospects.   

In contrast, the manufacturing sector saw the largest decrease in business confidence this month, declining 12 points to 39%, due to increased concerns about supply chain disruptions. Construction firms also saw a decline to 48% and businesses in the service sector saw confidence decline to 47%. 

Hann-Ju Ho, Senior Economist, Lloyds Commercial Banking, said: "Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally. 

"Despite this, today's data continues to reflect a positive growth trend in the UK economy. With confidence maintaining last month’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities."