Business confidence in West Midlands is joint highest in the UK, according to latest report from Lloyds

Companies in the region reported lower confidence in their own business prospects month-on-month, down eight points at 60 per cent, but their optimism in the economy rose 15 points to 66 per cent. 

Taken together, this gives a headline confidence reading of 63 per cent - versus 59 per cent in November – the joint-highest of any UK region or nation, alongside London (63 per cent).

Looking ahead to the next six months, West Midlands businesses identified their top target areas for growth as introducing new technology, such as AI or automation (58 per cent), investing in their team, for example through training (48 per cent) and evolving their offering, for example by launching new products or services (46 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 rose five points in December to 47 per cent. While firms’ confidence in their own trading prospects dropped one point to 52 per cent, their optimism in the wider economy strengthened 11 points to 42 per cent. The East Midlands (56 per cent) was the next most-confident part of the UK in December, after the West Midlands and London. 

Construction saw the sharpest improvement, up 22 points to 61 per cent, its highest level seen this year. Manufacturing also was up five points to 49 per cent, while retail firms edged higher to 47 per cent, likely reflecting seasonal demand. Services confidence fell one percentage point to 41 per cent. 

Dave Atkinson, regional director for the West Midlands at Lloyds which has a regional office in Colmore Row in Birmingham, said: "It's encouraging to see West Midlands businesses leading the country in optimism as we end the year.

“This is a positive backdrop for firms setting out their 2026 growth strategies, which we’ll be on hand to support.” 

Hann-Ju Ho, senior economist at Lloyds Commercial Banking, added: “It is great to see business confidence ending the year on a higher note, up 10 points from the start of the year.

“The uplift in business confidence is driven by an 11 point increase in optimism in the wider economy, increasing to a four-month high.

“Confidence changed most in the construction sector which saw a big boost in December, to the highest level this year.”