Companies in the West Midlands reported higher confidence in their own business prospects month-on-month, up 30 points at 67 per cent.

When taken alongside their optimism in the economy, up 16 points to 57 per cent, this gives a headline confidence reading of 62 per cent (vs. 39 per cent in September) – the joint-highest of any UK nation or region, alongside the North East (62 per cent). 

A net balance of 60 per cent of businesses in the region also expect to increase staff levels over the next year, up 20 points on last month.  

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as investing in their team, for example through training (56 per cent), evolving their offering, for example by introducing new products and services (39 per cent) and introducing new technology, such as automation or AI (39 per cent). 

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

Overall, UK business confidence climbed eight points in October to 50 per cent.  

Firms’ optimism in their own trading prospects rose 11 points to 62 per cent, while their confidence in the wider economy climbed six points to 39 per cent. 

London (60 per cent) was the second-most confident UK nation or region. 

October saw the manufacturing sector’s confidence increase by 31 points to 62 per cent, indicating stronger momentum in the sector.

Retail firms also reported a rise in confidence, with the figure increasing by 13 points to 53 per cent.

Construction saw a confidence gain for the first time in five months, increasing 23 points to 58 per cent.

However, the service sector saw a decline for a third consecutive month, falling three points to 44 per cent.   

Dave Atkinson, regional director of the West Midlands at Lloyds, said: “It’s particularly good to see that this confidence is driven by firms feeling more confident in their own trading prospects – a reflection of the innovation, ambition and resilience across the region’s business community.  

“West Midlands firms are setting out clear plans for the next phases of their growth – from investing in their team through hiring and training, to capitalising on new technologies. We’ll continue to provide our support every step of the way as they take these next steps.”   

Hann-Ju Ho, senior economist, Lloyds Commercial Banking, said: “Business confidence has risen following a fall in September, with trading prospects and economic optimism nearing the levels reported in the summer. Pricing pressures appear to have eased but continue to be driven primarily by general inflation and rising input and staffing costs. 

“Over the course of this year, firms have demonstrated their resilience by adapting to challenges, despite higher labour costs, by focusing on hiring and workforce development.”