Tougher economic conditions are taking their toll on business confidence across the Midlands, as company profits continue to decline, according to the latest Business in Britain survey from Lloyds TSB Commercial.
Firms’ optimism about prospects for the coming six months has hit its lowest level since the survey began. The Business Confidence Index for July shows that the balance of firms expecting better rather than worse order books, profits and sales, over the next six months plunged to minus six per cent, from 17 per cent in January.
Taking order book levels alone, the balance of companies expecting higher rather than lower levels in the coming six months, dropped to three per cent from 21 per cent in January.
In addition a balance of just three per cent of firms is predicting higher rather than lower sales, compared to 27 per cent six months ago, while the balance of companies expecting higher rather than lower profits has fallen from two per cent to minus 25 per cent.
Nationally the trend of falling profits, sales and order books is reflected across all sectors, especially in construction and retail, where the balance of firms expecting higher sales for the first half of the year hit minus 19 per cent and minus 22 per cent respectively.
The least affected sectors were transport and communications.
John Robson, regional director, Lloyds TSB Commercial in the Midlands, said: “The challenging economic climate is putting Midlands businesses to the test.
“And with sales and profits squeezed, it’s no surprise that so many firms are suffering a lack of confidence.
“But the reality is that many firms will be able to weather this storm. And with the right support and financial help, there’s every reason for strong businesses to continue growing.”