West Midlands Leads UK in Business Confidence as Growth Outlook Strengthens

The West Midlands is riding a wave of renewed optimism, with business confidence in the region rising two points during March to hit 62%, according to the latest Business Barometer report from Lloyds Bank. That figure marks the joint-highest confidence level of any UK nation or region, tying with London, and reflecting a growing appetite for expansion and resilience in the face of broader economic uncertainty.

The monthly Business Barometer, which surveys 1,200 UK businesses and has tracked economic sentiment since 2002, offers crucial insights into both regional and national trends. This March's data, collected between the 3rd and 17th of the month ahead of the Spring Statement, reveals a standout performance from West Midlands firms that may well shape the narrative of UK recovery in 2025.

Confidence in Business Prospects Drives Overall Optimism

Businesses across the West Midlands reported a strong rise in confidence regarding their own trading prospects, jumping five points to 70%--a robust indication that local firms believe in their ability to navigate current conditions and drive growth. Although optimism in the broader UK economy dipped slightly by two points to 53%, the composite headline reading of 62% is still an impressive signal of strength.

This resilience appears rooted in action-oriented plans. Looking ahead over the next six months, companies across the region are setting their sights on tangible areas for expansion: 45% are eyeing entry into new markets, 44% plan to invest in team development through training, and 43% aim to evolve their offerings by launching new products or services.

Dave Atkinson, regional director for the West Midlands at Lloyds Bank, expressed enthusiasm at the region’s upbeat sentiment. “It’s great to see such a positive outlook from the West Midlands’ businesses, buoyed by strong confidence in their own prospects,” he said. “We’ll be ready to support the region’s businesses as they now look to act on this outlook and make investments for future growth–whether that’s entering new markets or investing in their team.”

Competition Rising, But Confidence Holds Steady

What makes the West Midlands’ rising confidence even more notable is that it comes despite rising global competition, particularly in sectors like digital services and e-commerce. Businesses here are not only contending with domestic economic shifts but also international players that appeal to UK audiences through more aggressive offers.

Take, for example, the growing presence of gambling sites not on Gamstop. These offshore operators, while technically outside UK regulations, continue to attract British players with high-value bonuses and fewer restrictions, competing directly with UK-based online gaming and entertainment services (Source: gamblingsitesnotongamstopuk.com). It's an example of how foreign competition is evolving, especially in consumer-facing sectors. And yet, West Midlands businesses are not backing down.

Regional vs. National Sentiment

Zooming out to the national picture, overall UK business confidence held steady at 49% in March, the same figure as February. While confidence in individual trading prospects stayed at 57%, belief in the broader economy fell one point to 40%. In this context, the West Midlands’ 62% stands tall.

Only London matched the Midlands in optimism, while the North West followed closely with a 59% confidence reading. Other regions reported less positive results, reflecting the patchy nature of recovery across the UK.

Sector-wise, retail stood out with a surge of seven points to 58%--its highest level since the pandemic, reflecting stronger consumer spending and improved trading conditions. Hann-Ju Ho, Senior Economist at Lloyds Commercial Banking, noted: “Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally. Despite this, today's data continues to reflect a positive growth trend in the UK economy.”

Not every sector fared so well, however. The manufacturing industry experienced a significant drop in confidence, down 12 points to 39%, largely attributed to renewed concerns about supply chain disruptions. Construction also saw a slip to 48%, and the service sector, which comprises a vast portion of the UK economy, dipped to 47%.

New Markets, New Skills, New Products

The Business Barometer’s deeper dive into growth priorities revealed that West Midlands companies are preparing to make moves in several strategic areas. Nearly half are aiming to tap into new markets, which could involve exporting, forming international partnerships, or simply branching out domestically into untapped territories.

Meanwhile, 44% of firms plan to bolster their internal capabilities through team training and development. This suggests an understanding that sustainable growth relies not just on products but on people. Upskilling teams could also be an answer to the ongoing skills shortage in many sectors, from tech to manufacturing.

Lastly, 43% of respondents want to refresh or expand their offerings, whether through new services, product innovation, or digital transformation. That focus on evolution is key for staying relevant in fast-moving industries and for competing effectively, both locally and on the world stage.

Bold Moves in the Heart of England

The West Midlands has taken things a step further by showing upward momentum. By hitting a headline confidence reading of 62%, companies in the region are leading by example. From training investment to product innovation, businesses in the West Midlands aren’t waiting for economic tides to turn–they’re paddling out to catch the next wave.