Businesses in the Midlands are more confident than at any point in the past two years and are hopeful of a revival in fortunes in 2010, according to a new report.
But despite the optimism as they enter the new year, local firms still remain cautious about the challenges ahead, according to the Business in Britain survey from Lloyds TSB Commercial.
The six-monthly report charts the performance of 342 Midlands companies and their views on prospects for the coming year.
Its business confidence index, which tracks firms’ expectations for sales, orders and profits over the coming six months, has risen to a balance of 15 per cent in the Midlands, from ten per cent in June this year.
This is the highest balance in the region since December 2007, when business confidence was at 17 per cent.
A closer look at the confidence index shows that expectations for both sales and orders have started to recover. The balance of firms anticipating an upturn in sales has climbed to 13 per cent, up from – nine per cent six months ago, with 43 per cent expecting an improvement and one-fifth braced for a decline.
Hopes for orders are also looking brighter. The balance expecting order levels to rise over the coming six months has climbed to 27 per cent, from zero per cent in the last survey.
John Robson, regional director, Lloyds TSB Commercial in the North and Midlands, said: “There are still many question marks over the likely strength and shape of the recovery.
“But confidence is the bedrock of every economy, and with businesses now more optimistic about their prospects for the year ahead, there is good reason to be hopeful that the upturn will gather pace early in 2010.
“That’s not to say that it will be a smooth ride. Businesses may be more upbeat overall but they are still wary about the future, having experienced such a turbulent time over the past year.
“The next six months will be critical and the path to recovery will depend on businesses’ approach to investing, recruiting and exploring new markets,” Mr Robson said.
On the strength of this improved outlook for sales and orders, businesses in the Midlands are more hopeful of better profits in the first half of 2010.
The balance of companies expecting better profits over the next six months was positive, rising to four per cent from a negative balance of – 22 per cent in June.
