Companies in the West Midlands reported lower confidence in their own business prospects month-on-month, down 13 points at 33 per cent.

When taken alongside their decreased optimism in the economy, down six points to 51 per cent, this gives a headline confidence reading of 42 per cent (vs. 52 per cent in July). 

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 (45 per cent), introducing new technology (39 per cent) and evolving their offering, for example by introducing new products or services (38 per cent). 

A net balance of 35 per cent of businesses in the region also expect to increase staff levels over the next year, up one point from July.  

The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide. 

Overall, UK business confidence in August remained unchanged from July at 50 per cent.  

Firms’ confidence in the overall economy increased two points to 47 per cent, offsetting marginally weaker confidence in their own trading prospects, which fell two points month-on-month to 54 per cent but remained above the long-term average.  

Output expectations for the various sectors remained at or near their three-year highs.

Construction had a steep increase to 58 per cent, up by 14 points, whereas other sectors experienced slight declines. Trading prospects for manufacturing dropped by 2 points to 58 per cent, at the same level as construction, while Retail and Services fell to 53 per cent down 7 and 3 points respectively. 

Dave Atkinson, regional director for the West Midlands, Lloyds Bank Commercial Banking said: “Although confidence fell during August, businesses are still targeting growth in the coming months.  

“It’s encouraging to see them investing in their teams a key priority and more businesses setting out plans to hire. Growing and investing in workforces have benefits that extend far beyond businesses themselves, supporting the resilience and prosperity of their local communities and the regional economy as a whole.” 

Hann-Ju Ho, senior economist, Lloyds Bank Commercial Banking, said: “As in July we’ve seen a particularly strong outcome for business confidence. It remains at an elevated level of 50 per cent, which is well above the long-term average of 29 per cent – and it has been above the average for the past 15 months.

“Official GDP data for the first half of this year was encouraging and the survey results indicate that solid economic performance will likely continue as we move into the second half of the year.  

“On a more cautious note, we have seen wage growth expectations pick up this month, although not enough to negate the downward trend so far in 2024.  

“Overall, the economy looks to be stable and from the positive results recorded, businesses are echoing this sentiment.”