Business confidence diverged sharply across the UK in July, with firms in the West Midlands and North West reporting stronger prospects while sentiment weakened in Scotland and the East Midlands. The national picture improved to a four-month high, but regional results suggest businesses remain sensitive to demand, costs and wider economic uncertainty.
Key takeaways
- West Midlands confidence jumped 19 points to 57%, supported by stronger customer demand and investment.
- North West confidence rose six points to 49%, moving above the UK average.
- Scottish confidence fell six points to 42%, while East Midlands confidence dropped seven points to 49%.
- UK-wide confidence increased five points to 49% in July.
The figures show that optimism is returning unevenly. Although many firms continue to plan for expansion, regional businesses are taking different views of the economic outlook and their ability to grow.
West Midlands leads the regional rebound
The West Midlands recorded the strongest improvement, with headline confidence rising from 38% in June to 57% in July. Firms’ confidence in their own trading prospects climbed 12 points to 65%, while optimism about the wider economy rose 26 points to 49%.
Improving customer demand was cited by 78% of businesses, followed by increased investment in capacity at 43% and better supply-chain conditions at 33%. Hiring intentions also strengthened significantly: a net 58% of firms expect to increase staff numbers over the next year, up 33 points from June.
Businesses’ main growth priorities include launching new products and services, training staff and entering new markets.
North West confidence moves above average
Confidence in the North West increased six points to 49%, compared with 43% in June. The rise was driven by a four-point improvement in firms’ own trading outlook, reaching 58%, and a seven-point increase in economic optimism, reaching 40%.
Winning new clients or contracts was the leading factor behind confidence in companies’ own prospects, while stronger market demand supported optimism about the economy. Firms are focusing on evolving their products and services, entering new markets and investing in employee training over the coming six months.
Scotland and East Midlands lose momentum
Scotland moved in the opposite direction, with confidence falling six points to 42%. Both firms’ trading outlook and their assessment of the wider economy declined by six points, to 51% and 34% respectively. Hiring intentions edged down to a net 37%, and confidence is now below the region’s 12-month average of 47%.
Even so, Scottish firms continue to plan for growth through new products and services, technology investment—including artificial intelligence and automation—and expansion into new markets.
East Midlands confidence also fell, dropping seven points to 49%, exactly matching its 12-month average. Economic optimism declined ten points to 38%, while confidence in firms’ own outlook fell three points to 60%. Hiring expectations fell seven points to 41%.
Stronger customer demand, investment in capacity or technology and competitive advantages remain important drivers. Training, product development and new customers are the region’s leading growth priorities despite the more cautious mood.
National confidence reaches four-month high
Across the UK, business confidence rose five points to 49%. Economic optimism increased 11 points to 42%, with firms pointing to lower global energy prices, unchanged Bank of England interest rates, stronger demand and improved economic news.
The outlook for companies’ own trading remained broadly stable at 56%. Overall, 65% of firms expect output to strengthen over the next year, although 9% anticipate weaker activity. The results indicate that businesses are still pursuing investment and productivity improvements, but regional disparities underline the uncertainty surrounding the recovery.
- North West business confidence rises in July, LBN Daily.
- Uptick in North West business confidence takes it back above UK average, TheBusinessDesk.com.
- West Midlands business confidence buoyant in July as economic optimism climbs – report, Greater Birmingham Chambers of Commerce.
- Scottish business confidence softens in July, DIGIT.FYI.
- East Midlands business confidence falls in July, East Midlands Business Link.
