West Midlands business confidence joint-highest in the UK

• Business confidence in the West Midlands rose four points to 63% in December.
• Firms’ optimism in their own trading prospects fell eight points to 60%, while optimism in the economy climbed 15 points to 66%.
• Overall UK business confidence rose five points in December to 47%

West Midlands business confidence was the joint-highest in the UK in December, according to the latest Business Barometer from Lloyds.

While companies in the West Midlands reported lower confidence in their own business prospects month-on-month, down eight points at 60%, their optimism in the economy rose 15 points to 66%. Taken together, this gives a headline confidence reading of 63% (vs. 59% in November) – the joint-highest of any UK region or nation, alongside London (63%).

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%), investing in their team, for example through training (48%) and evolving their offering, for example by launching new products or services (46%).

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.

National picture

Overall, UK business confidence rose five points in December to 47%.

While firms’ confidence in their own trading prospects dropped one point to 52%, their optimism in the wider economy strengthened 11 points to 42%.

The East Midlands (56%) was the next most-confident part of the UK in December, after the West Midlands and London.

Sector Insights

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

Dave Atkinson, regional director for the West Midlands at Lloyds, 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, Lloyds Commercial Banking, said: “It is great to see business confidence ending the year on a higher note, up ten 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.”