Business confidence in the West Midlands fell by 27 points to 42% in October, even as the national picture improved, according to the latest Lloyds Bank Business Barometer. The regional reading dropped from 69% in September and was below its 12-month average of 55%, reversing much of the earlier optimism.
The change reflected weaker assessments of both the wider economy and companies’ own prospects. Optimism about the economic outlook fell 40 points to 33%, while confidence in businesses’ individual trading prospects dropped 16 points to 50%. The regional score consequently moved down seven places in the ranking of UK nations and regions.
Across the UK as a whole, the bank recorded a six-point rise in confidence to 47%, with improvements in nine of the 12 nations and regions. The comparison underlines how unevenly economic sentiment is distributed: businesses in one region can become substantially more cautious even when the headline national measure moves upwards.
The West Midlands results did not signal a general withdrawal from hiring. A net balance of 39% of regional businesses expected to increase staff over the following 12 months, although that was 15 points lower than in September. The figures measure respondents’ plans and confidence, not actual employment changes or guaranteed recruitment.
Among respondents who remained optimistic about the economy, 57% cited stronger customer or market demand, 33% pointed to improving interest rates or financial conditions, and 31% identified better economic data or news. Those reasons sit alongside the marked deterioration in the overall confidence measure, showing that respondents distinguished their immediate opportunities from the broader outlook.
Asked about their growth priorities over the next six months, 52% of regional businesses identified investing in their teams, including training. Investment in sustainability was cited by 42%, and introducing new products or services by 38%. These are reported priorities rather than confirmation that the planned expenditure has already taken place.
The national breakdown shows different pressures by sector and company size. Confidence among retail businesses fell 12 points to 39%, while construction edged down two points to 45%. Services and manufacturing recorded stronger sentiment. Smaller companies with turnover below £5m were more optimistic, while confidence among businesses turning over between £25m and £100m weakened.
Lloyds surveyed approximately 1,200 businesses nationally, including 137 in the West Midlands. Interviews were conducted between 2 and 15 October, before the Autumn Budget, so the figures should not be interpreted as a response to subsequent fiscal decisions.
Graham FitzGerald, Lloyds’ regional director for the West Midlands, described businesses as more cautious about economic conditions while continuing to invest in their operations. The survey captures that distinction: sharply reduced confidence alongside continuing reported intentions to recruit, develop staff, and introduce products.
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