Business confidence in the West Midlands fell 24 points during June to 38%, according to the latest Business Barometer from Lloyds.
Companies in the West Midlands reported lower confidence in their own trading outlook month-on-month, down 14 points at 53%. When taken alongside their optimism in the economy, down 33 points to 23%, this gives a headline confidence reading of 38% (vs. 62% in May 2026).
Despite this, West Midlands firms reported strong customer demand (67%) as a driver of confidence in their own trading outlook.
A net balance of 25% of businesses in the region expect to increase staff levels over the next year, down 24 points on last month.
Business confidence in the West Midlands now sits below the 12-month average of 54%, with its highest figure of 66% in March 2026.
Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as evolving their offering through new products or services (48%), investing in their team through training and development (43%) and entering new markets (40%).
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.
Dave Atkinson, Regional Director for the West Midlands at Lloyds, said: “The region’s businesses are at a turning point. Confidence has declined sharply, but it’s positive to see that companies are redirecting their investment, rather than scaling back altogether.
“Their focus on product development, team training and new market entry shows pragmatism over pessimism. West Midlands firms have the ambition to recover but need support to achieve this. We’re continuing to work with our customers to provide them with the tools and resources to thrive amid the current conditions.”
National picture
Overall, UK business confidence fell three points in June to 44%.
Firms’ trading outlook fell two points to 56% and their optimism in the economy generally also fell four points to 31%.
The 12-month average for overall confidence is currently sitting at 47% and is trending above the long-term average of 30% since the survey began in 2002.
Despite a modest softening in business confidence due to wider global uncertainty, two thirds of firms nationally (64%) expect stronger output over the year ahead and hiring intentions for the coming twelve months strengthened for the first time since March.
The share of firms planning to increase their workforce rose to 55%, while 14% anticipated headcount reductions, leaving the net balance up five points at 41%. Firms intending to hire cited the need to meet strengthening demand and expand capacity, pointing to a degree of confidence in near-term activity.
Business confidence rose across six of the twelve UK regions and nations in June, with the South West seeing a 22pp jump to 44%, and the East Midlands becoming the most confident region.
Amanda Murphy, CEO for Lloyds Business and Commercial Banking, said: “Confidence has edged down this month, and that reflects what we’re hearing directly from businesses. Many are still dealing with a mix of higher costs, uncertain demand and a wider global backdrop that feels difficult to read.
“That is weighing on decision making, particularly for firms that are focused on the UK market and have fewer ways to offset those pressures.
“However, this is not a picture of businesses stepping back altogether. Trading outlook remains relatively steady and we continue to see firms looking for new opportunities, even if investment plans have become more cautious.
“Businesses have shown over time that they can adapt in tough conditions, but for many the priority is managing costs and maintaining stability rather than pushing for growth”
