Suirvey results bode well for region's economy
"It is noticeable just how much more optimistic businesses in Coventry & Warwickshire are feeling than what we see across the rest of the country"
Businesses in Coventry and Warwickshire have entered 2020 with renewed confidence - and the data from the latest Quarterly Economic Survey (QES) "bodes well," for the region believes Warwickshire County Council's assistant director for communities, Dave Ayton-Hill.
The results of the Coventry and Warwickshire Chamber of Commerce’s final QES of 2019 reveal that firms in both service and manufacturing sectors were more positive about the future than in the three months previous.
That was against a backdrop of slight decreases in domestic and overseas orders, as well as a fall in employment prospects, leading to a slight downgrade in the overall economic picture.
However, the survey, which is partnered by Prime Accountants and analysed by Warwickshire County Council, showed that Coventry and Warwickshire is still considerably above the national average when it comes to economic performance.
The County Council’s analysis uses a similar score to the national Markits Purchasing Managers Index (PMI) where 50 is the balance and anything above means the majority feel positive and anything below means the reverse.
Using that format, confidence in the service sector rose from 72.2 to 74.7 and in manufacturing it was up from 61.8 to 65.4 compared to the previous quarter. Domestic orders in manufacturing went down from 56.5 to 55.2 and overseas orders fell from 56.1 to 52.4. In the service sector, domestic orders went from 62.4 to 61.1 and overseas orders dropped from 53.9 to 50.9.
All the data led to an overall economic outlook score of 60.8 for Coventry and Warwickshire – slightly down on the score of 61 recorded in the third quarter of 2019 but still way above the national average.
“While the overall Economic Outlook score has fallen ever so slightly, it is noticeable just how much more optimistic businesses in Coventry & Warwickshire are feeling than what we see across the rest of the country," said Mr Ayton-Hill.
"Our overall Index score of 60.8 compares to the UK wide PMI score of 49.7 – which actually shows that the slight majority of businesses are experiencing a contraction of activity rather than growth.
"Over the past few years, the business base of Coventry & Warwickshire has been more confident about growth than the national picture, which has translated into faster-than-average economic growth rates. The continued strong position shown in this latest Quarterly Economic Survey therefore bodes well for 2020, and the various challenges and opportunities it will inevitably bring."
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said firms were cautiously optimistic at the start of the new decade but that the new Government must prioritise economic growth and create greater certainty for business.
She said: “The end of 2019 brought a new Government and, with it, a degree of certainty about the future direction of the country. This must now be backed up by policy that delivers real incentives to firms to invest and grow and remove some of those up-front costs from doing business.
“We need investment in infrastructure and a strategy for overseas trade – both with the EU and beyond.
“So while the economic outlook for Coventry and Warwickshire saw the slightest of falls it is encouraging to see that confidence is beginning to pick up and it is vital that the seeds of that optimism are nurtured in the coming weeks and months.
“We will be working with businesses in the region to support their growth and will continue to be their voice to decision-makers in order to ensure that the needs and aspirations of companies across Coventry and Warwickshire are heard.”
Steve Harcourt, Director Prime Accountants Group, said: “As predicted in the previous quarter, the final three months of 2019’s economic results for Coventry and Warwickshire have shown a dip in all areas of the survey apart from ongoing and future business confidence."