Confidence dips but remains well above national average
"The manufacturing sector in particular stays strong and optimistic for the quarter to come as contingency plans come in to play"
Business confidence in Coventry and Warwickshire has taken a dip according to a major survey of firms across the region.
Figures from the Coventry and Warwickshire Chamber of Commerce’s latest Quarterly Economic Survey (QES) show that fewer companies in both manufacturing and service sectors feel confident about the 12 months ahead.
The QES quizzes more than 400 businesses, acting as a barometer for the local economy, as well as feeding into the British Chambers of Commerce’s national survey.
The local results are analysed by the Economy & Skills Team at Warwickshire County Council and are given a rating between one and 100, where 50 is balance, anything above shows growth and anything below shows contraction.
Confidence in the service sector dropped from 83.6 in the previous quarter to 68.1 and from 70.3 in manufacturing to 67.6. Both remain well ahead of the national average.
The overall economic outlook – where domestic and overseas orders are taken into account, alongside investment & cashflow and employment intentions – was down from 63.4 in the first quarter of 2019 to 60.9.
The bright spot was overseas orders in both the manufacturing and service seeing a rise, from 52.1 in the service sector to 55.9 and from 55.8 to 63.0 in manufacturing.
David Ayton-Hill, Assistant Director for Communities at Warwickshire County Council, said: “As a result of the surrounding economic climate it comes as no surprise that business confidence is falling for both the manufacturing and the service sectors in Coventry & Warwickshire, with increased cost pressures, competition internationally and surrounding uncertainty
“Overall, Coventry and Warwickshire is seeing, from both the service and manufacturing sectors, that animal spirits are starting to kick in as businesses start to realise that clarity on the surrounding economic conditions is becoming increasingly distant.
“The outlook for the next quarter sees businesses using investment and overseas sales to drive themselves forward. There are still naturally concerns and decreased business confidence as a result of competition, cost pressures and exchange rates but both sectors remain resilient.
“The manufacturing sector in particular stays strong and optimistic for the quarter to come as contingency plans come in to play with the service sector hopeful for increased consumer confidence and orders in the near future.”
Louise Bennett, Chief Executive of the Coventry and Warwickshire Chamber of Commerce, said the region was holding up well compared to other areas of the country but believes uncertainty is having an impact.
She said: “Coventry and Warwickshire is a strong, robust and forward-thinking economy with fantastic businesses right across the patch, who have faced many challenges over the past decade or so.
“Uncertainty is starting to kick-in and is impacting on the way businesses are thinking about the present and the future, which will be a major factor in why we have seen a fall in confidence.
“The fact that Coventry and Warwickshire is above the national average shows the underlying strength we have in the economy but we are not immune from external factors that affect the way businesses operate.
“My message to Government and to the next Prime Minister would be to ensure we avoid a messy and disorderly Brexit and give companies the conditions they need to thrive and grow now and in the future.”
* From the next quarter, the QES will be sponsored by Prime Accountants.
Summary of 2019 Q2 Key Numbers:
Overall 60.9, down from 63.4
Service Sector 60.7, down from 64.7
Manufacturing Sector 61.4, up from 59.9
Service Sector 61.7, down from 62.5
Manufacturing Sector 62.3, up from 59.7
Service Sector 55.9, up from 52.1
Manufacturing Sector 63.0, up from 55.8
Service Sector 58.3, down from 60.3
Manufacturing Sector 56.0, down from 57.2
Service Sector 56.7, down from 57.4
Manufacturing Sector 58.2, up from 54.0
Service Sector 68.1, down from 83.6
Manufacturing Sector 67.6, down from 70.3